Tiebout Sorting, Zoning, and Property Tax Rates

This paper examines certain implications from the literature on Tiebout’s model of local gov-ernment service provision, particularly Hamilton’s extension of the model to include local control of land use and property taxation. Our empirical analysis focuses on the use of fiscal zoning to lower property tax rates, a topic that has not been addressed in the extensive Tiebout literature. Using data for over 100 municipalities in the Miami, Florida, metropolitan area, we specify property tax rates as a function of fiscal zoning measures, other municipal characteristics, and tax mimicking. We conclude that single-family zoning is by far the most important variable ex-plaining municipal property tax rates.

Neighbour effect: applicability of tax mimicking concept to setting tariffs for water provision in Poland

In our paper, tariff mimicking is interpreted as a specific type of yardstick competition. Local authorities compete for political capital and, in order to maintain (or increase) it, they compare their voter-sensitive policies with the policies of other local governments. The phenomenon of mimicking is related to the subject of inter-jurisdictional interactions. We try to identify the phenomenon of mimicking in local fees for water provision in Poland in the period 2013–2017. Our empirical strategy is based on two methods: spatial lag regression and a quasi-experimental design using a difference-indifferences method. In the latter method, we first identify local governments that have considerably increased their tariffs for water. Next, we compare whether their immediate neighbouring municipalities are more likely to follow the change than a ‘control group’ of similar, more distant, local governments. The results of our study confirm the existence of geographical interactions in the tariff policies of Polish local governments. Furthermore the results of our regression models confirm that ‘mimicking interactions’ are stronger in the case of tariffs for water provision than for local tax policies.

Spatial interdependence in property taxation: the case of Polish municipalities

Research background: Real estate and urban economics literature are abundant in studies discussing various types of property taxes and their characteristics. A growing area of re-search has been focused on tax equity, tax competition, and yardstick competition, where the latter two reflect the idea of tax mimicking. Recently, due to substantial developments in spatial and regional economics, more attention has been drawn to spatial effects. Empirical results are focused on spatial interaction and diffusion effects, hierarchies of place and spatial spillovers. Property tax system in Poland differs from those utilized in the majority of developed countries. As a consequence, property tax policy at the local government level (including tax competition and tax mimicking effects) in Poland can differ substantially from those found in previous research in the US and other European countries. There are few studies addressing the problem of tax competition and tax mimicking in Poland from an empirical perspective. Purpose of the article: In the article, we explore spatial interdependence in property taxation. We identify clustering or dispersion of high and low values of the tax rates within major metropolitan areas in Poland. The effects can indicate the presence of tax mimicking among municipalities in given metropolitan areas. Methods: We analyze the data from 304 municipalities in 10 metropolitan areas in Poland from the year 2007 to 2016. The data covers four property tax rates: (1) on residential buildings (2) on buildings used for business purpose (3) on land used for business purpose (4) on land for other uses. To explore the spatial distribution of rates, we used global and local spatial autocorrelation indicators (Moran’s I statistic and LISA). Findings & Value added: The results suggest the presence of spatial correlation within metropolitan areas. We also found significant differences between metropolitan areas. The results of the study fill the gap in empirical research concerning property tax interdependencies and tax mimicking in Poland.