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

• 成果类型: Article
• 署名作者: de Bartolomé, CAM; Rosenthal, SS
• 署名单位: University of Colorado System; University of Colorado Boulder; Virginia Polytechnic Institute & State University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/003465399767923845
• 发表日期: 1999-02
• 页码: 85-95
• 关键词: home mortgage debt; borrowing constraints

摘要

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.