Assessing the Distributive Impact of a Revenue-Neutral Shift from a Uniform Property Tax to a Two-Rate Property Tax with a Uniform Credit

A number of economists have argued that a property tax with a lower rate applied to improvement values than land values is superior to a property tax with a uniform tax rate that yields the same total revenue. This paper explores the statutory incidence of shifting to two-rate property taxation from single-rate property taxation. The authors recommend a tax credit provision to mitigate the regressive tendencies of this type of tax reform.