A new test for equitable real estate tax assessment

Paglin and Fogarty (1972) proposed a correct conceptual view of equitable property tax assessment, but attempts to find an empirical test of their model have become mired in technical issues. The new empirical test proposed here is based on the notion that the market value of an individual property is essentially unobservable.Empirical results for 52 towns in Connecticut show that the new model (a 2SLS procedure) removes a substantial part of the biases present in other tests. Moreover, the 2SLS procedure provides a method for removing the time trend from sales prices. Thus, sales prices can be adjusted to the date of assessed value allowing evaluation of assessment practices as opposed to assessment lags. This refines previous approaches, and it substantially expands the number of transactions that can be used to evaluate equity in property tax assessment practices.     

Real estate transfer taxes and property values: The Philadelphia story

We examine the effect of the 1988 increase in the Philadelphia real estate transfer tax on the sale price of residential property. We find that sales prices fell, as expected. While sampling variability is slightly higher than desirable, the point estimate of the key coefficient indicates a decrease in house price far greater than what would be expected with perfect capital markets. This may be attributed to either capital market imperfections or the news value of the tax increase. The burden of the transfer tax thus rests on the seller.     

地方财政支出对房地产价值的影响——基于我国35个大中城市的实证研究

运用普通最小二乘法,对我国35个大中城市的数据资料进行多元回归,分析地方财政支出对房地产价值的影响,其结论是地方财政支出和房地产价值存在高度正相关关系,城市持续高水平的财政支出,经过一段时间的积累,必定通过房地产价值的增加体现出来.由此引出了对我国房地产税进行改革的启示.     

House Prices and Local Taxes in the UK

In this paper, estimates of the effects of local domestic property taxes (rates) on local house prices are presented, and the effect of local taxes on owner-occupied dwelling prices is calculated for a number of English cities for the period up to 1990. The methods used enable estimation to be made of the effect of the introduction, during 1990, of the Community Charge or poll tax in England, when the local tax base was moved from housing consumption onto individual residency. It is estimated that the reform could have increased house prices by around 15 per cent and contributed substantially to house price inflation.     

Reporting of book-tax differences for financial and tax purposes: A case study

Recent events in financial and tax accounting have brought the issue of financial accounting for tax expenses to the forefront of both the accounting profession and academia. Complexities abound on both sides, from ASC 740/FAS 109 and ASC 740-10/FIN 48 issues on the financial accounting side to the Schedule M-3 and Schedule UTP reporting requirements on the tax side. This complexity has created a vacuum in accounting curricula, as bits and pieces of the total puzzle are covered in the intermediate accounting and tax courses, without a comprehensive, integrated review in one place.     

Imperfect competition,indirect tax harmonization and public goods

This paper shows that the welfare implications of indirect tax harmonization in a two-country imperfectly competitive framework, are, in general, indeterminate in the presence of public goods: Both countries can be made either worse off or better off. This holds under both the destination and origin principles of taxation and is in sharp contrast to existing results where revenue effects are not present. A consequence of this indeterminacy is that a precise evaluation of tax-harmonizing policies under both tax regimes requires an explicit consideration of the underlying preferences for private and public goods as well as the oligopolistic sectors’ relative cost structures. JEL code F15⋅ H21⋅ H41⋅ H87     

Labor tax reform, unemployment, and search

A key obstacle to reducing payroll taxes in many industrialized and transition countries is the direct revenue loss to the government that it implies. This paper studies a simple and practical labor tax reform of reducing a payroll tax and increasing a progressive wage tax that keeps the marginal tax wedge unchanged. Such a strategy increases employment, reduces the equilibrium unemployment rate, and increases public revenue as long as workers do not have all the bargaining power in wage negotiations. Moreover, welfare rises if workers’ bargaining power is sufficiently large to exceed a critical value determined by the second-best Hosios condition.      

Comprehensive versus partial deferred tax liabilities and equity market values

This study investigates the value relevance of the deferred tax liability recognized using comprehensive versus partial allocation. Our research examines New Zealand firms who, prior to the introduction of International Financial Reporting Standards, were free to choose between comprehensive and partial allocation. We test the joint hypothesis that the partial, as opposed to comprehensive, deferred tax liability is relevant for equity valuation and is sufficiently reliable to be reflected in investors’ valuation assessments. Our results are consistent with this prediction.     

Should we subsidize work? Welfare reform,the earned income tax credit and optimal transfers

During the 1990s, US income transfer and tax policies shifted towards trying to encourage work among low-income families. Optimal tax theory, however, suggests that work subsidies are usually an inefficient way to raise the incomes of poor families unless the work effort of recipients has external benefits and/or tax payer/voters prefer redistributing income to the working poor rather than the idle poor. This paper discusses the conditions under which work subsidies may be economically efficient and assesses empirical evidence that suggests that welfare reform and expansions of the EITC have increased work effort among low income families, but is inconclusive about whether the policy shift has enabled them to advance beyond entry-level jobs or benefited their children.     

政府间税收划分的规律性:基于OECD国家的例证

实践中,尽管流动性税基在政府间的划分呈多元化,但依然存在规律性.这种规律并不是仅依据税种属性,而是追求较高的税收效率.其关键在于,在客观条件和制度设置约束下,税基是否发生流动.只要具备相应的约束条件,流转税与所得税都可以划给地方政府.基于这种规律性,我国政府间税收划分制度需要进一步改进,完善的思路应该是在增加地方对个人所得税分享的基础上,降低对增值税的分享比例.     

Overbuilding,real estate lending decisions,and the regional economic base

The primary purpose of this paper is to evaluate the causes of overbuilding in the context of economic base theory. A second and closely related purpose is to determine if the economic base multiplier effect is stronger in the long run. Construction decisions depend on the strength of the local economy. Since basic activity is highly cyclical, if there are significant lags in the multiplier process running from basic to nonbasic sectors, then growth in non-basic employment will continue when the basic sector slows or declines. Hence, overbuilding may be, in part, a result of false signals about future growth in the local economy to builders, developers and lenders at the time a project is conceived. In addition, one of the important sources of the lags in the multiplier process is the construction sector. Potential solutions to overbuilding are discussed in an economic base context. The implications for bank regulation, bank lending and feasibility analysis are discussed.     

How would the introduction of an EU-wide formula apportionment affect the distribution and size of the corporate tax base? An analysis based on German multinationals

This paper analyses the effects of introducing a common EU tax base with formula apportionment on the size of the EU-wide tax base and on the distribution of the tax base between the EU member countries. We use a combined dataset of Deutsche Bundesbank's Foreign Direct Investment data (MiDi) and corporate balance sheet data (Ustan and Hoppenstedt) for the tax base estimations. The data are used to construct (i) a separate accounting and (ii) a formula apportionment tax base for the firms in the sample. Our results suggest that due to border crossing loss offset, the EU-wide corporate tax base represented by our data sample shrinks significantly. Smaller countries which are usually considered to attract book profits under the current system, i.e. Ireland and the Netherlands, tend to lose a larger part of their tax base than larger countries like Germany, Italy, France or Great Britain. However, these results should be evaluated in light of the limitations of the data used in this study since our analysis is based on German FDI data only. Furthermore, the calculations do not take into account behavioral responses of companies caused by such a system change. JEL Code: F23 · H25 This paper represents the authors' personal opinions and does not necessarily reflect the views of the Deutsche Bundesbank or its staff. We thank Heinz Herrmann, Jana Kremer, Alfons Weichenrieder, and the participants of the Deutsche Bundesbank FDI Workshop held on September 13, 2005, in Frankfurt for their valuable comments. We are also indebted to George Zodrow and two anonymous referees. The usual disclaimer applies. An erratum to this article can be found at