CITY TAXES AND PROPERTY TAX BASES

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Abstract
This paper investigates the simultaneous relationship between tax rates and city property tax bases using data for 86 large U. S. cities in 1972, 1977, and 1982. We find that a 10 percent increase in a city's property tax rate decreases the property tax base by about 1.5 percent. Local income taxes and taxes levied by overlying jurisdictions also have negative impacts on the city's property tax base. We conclude that taxes affect local property values more than is typically implied by previous studies that have investigated the impacts of state and local taxes on firms' location decisions.

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