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Effective Property Tax Rates and Capital Formation Issues: Manvel, Acton and Darby
Author(s) -
Buckley Robert M.,
Simonson John
Publication year - 1987
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00412
Subject(s) - taxable income , economics , monetary economics , inflation (cosmology) , capital (architecture) , property (philosophy) , property tax , capital gains tax , state income tax , macroeconomics , tax reform , public economics , philosophy , physics , accounting , archaeology , epistemology , theoretical physics , history
Using comparatively new data sources, this study estimates that effective property tax rates on taxable capital declined nearly 50% in the U.S. during the decade of the 1970s, a phenomenon generally overlooked or understated in previous studies. Recognition of this halving of property tax rates permits at least a partial explanation for a number of otherwise unexplained macroeconomic occurrences during the 1970s, particularly the smaller‐than‐anticipated interactive effects of inflation and the income tax on interest rates, on the one hand, and on capital allocation, on the other. The clear implication is that greater attention must be paid to trends in effective property tax rates in understanding and predicting important economic behavior.