Property tax capitalization in a model with tax-deferred assets, standard deductions, and the taxation of nominal interest

Charles A.M. De Bartolomé, Stuart S. Rosenthal

Research output: Contribution to journalArticle

9 Scopus citations

Abstract

Previous property tax capitalization studies assume that families itemize, that they save in taxable assets, and that real interest income is taxed. However, many families do not itemize, many families invest in tax-deferred assets, and nominal interest income is taxed. As a consequence, prior studies likely misspecify the property tax capitalization equation for roughly ninety percent of their samples. Taking federal tax provisions into account increases the precision of our estimated capitalization rate. In addition, our results suggest that biases in prior studies likely contribute to the variety of capitalization estimates in the literature.

Original languageEnglish (US)
Pages (from-to)85-95
Number of pages11
JournalReview of Economics and Statistics
Volume81
Issue number1
DOIs
StatePublished - Feb 1999
Externally publishedYes

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Property tax capitalization in a model with tax-deferred assets, standard deductions, and the taxation of nominal interest'. Together they form a unique fingerprint.

Cite this