Traditional View of the Incidence of the Property Tax: an Examination

Abstract

The traditional view of the incidence of the property tax is that consumers bear the entire burden of the tax on capital and landowners bear the entire burden of the tax on land if the supply of land is completely inelastic. This article examines the conditions under which the traditional view is valid when a property tax is imposed in a residential city with fixed population and area. Calculations using estimates of the parameters of the model indicate that the traditional view is a good approximation to the absolute or the differential incidence of the propertvitax.