Property taxation as compensation for local externalities: Evidence from large plants

IF 4.8 1区 经济学 Q1 ECONOMICS
Rebecca Fraenkel , Sam Krumholz
{"title":"Property taxation as compensation for local externalities: Evidence from large plants","authors":"Rebecca Fraenkel ,&nbsp;Sam Krumholz","doi":"10.1016/j.jpubeco.2024.105294","DOIUrl":null,"url":null,"abstract":"<div><div>Large scale industrial plants often create broad economic benefits, but impose harms on nearby residents. When local jurisdictions have control over land use, such plants may not be built absent sufficient compensation. In this paper, we study the extent to which large plants’ property tax payments compensate for local harms and whether local governments internalize these fiscal benefits when making decisions about local industrial development. We first demonstrate that the tax base impact of plant openings are economically large, lead to increases in local expenditures and reductions in local property tax rates, and are valued by local residents. We next show suggestive evidence that limiting local jurisdictions’ access to property taxation reduces the likelihood that they will contain large industrial plants. Together, these results suggest that increases in the local tax base are an important benefit of large externality-producing projects that are valued by residents and that local governments may internalize the fiscal impact of these plants when making development decisions.</div></div>","PeriodicalId":48436,"journal":{"name":"Journal of Public Economics","volume":"243 ","pages":"Article 105294"},"PeriodicalIF":4.8000,"publicationDate":"2025-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Public Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0047272724002305","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0

Abstract

Large scale industrial plants often create broad economic benefits, but impose harms on nearby residents. When local jurisdictions have control over land use, such plants may not be built absent sufficient compensation. In this paper, we study the extent to which large plants’ property tax payments compensate for local harms and whether local governments internalize these fiscal benefits when making decisions about local industrial development. We first demonstrate that the tax base impact of plant openings are economically large, lead to increases in local expenditures and reductions in local property tax rates, and are valued by local residents. We next show suggestive evidence that limiting local jurisdictions’ access to property taxation reduces the likelihood that they will contain large industrial plants. Together, these results suggest that increases in the local tax base are an important benefit of large externality-producing projects that are valued by residents and that local governments may internalize the fiscal impact of these plants when making development decisions.
求助全文
约1分钟内获得全文 求助全文
来源期刊
CiteScore
14.10
自引率
2.00%
发文量
139
审稿时长
70 days
期刊介绍: The Journal of Public Economics aims to promote original scientific research in the field of public economics, focusing on the utilization of contemporary economic theory and quantitative analysis methodologies. It serves as a platform for the international scholarly community to engage in discussions on public policy matters.
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信