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Volatility of Individual Property Tax Payments

Nathan B. Anderson

March 2010, English

The most important independent source of local government revenue in the United States is the property tax. Yet the widespread unpopularity of the property tax leads voters to support state policies that limit or redefine their property tax bases, thereby restricting total government revenue. Extensive research exists on what motivates taxpayers to vote for these policies. However, this prior research focuses on how the levels and changes in total revenues may affect motivation or support for tax limits. This paper establishes that understanding the levels of and changes in the tax payments of individual taxpayers is critical to understanding the motivations of individual taxpayers’ support for property tax limitations. Using data sources from the Minnesota Department of Revenue, this paper explains why property taxes vary among taxpayers and for individual taxpayers over time; it concludes that policies focusing solely on restricting local government revenue fail to address much of the cause of variation in individual property tax bills over time.


Local Government, Property Taxation, Taxation