Maximization of Non-Residential Property Tax Revenue by a Local Governmen GCP-07-06

John F. McDonald
Professor Emeritus of Economics and Director, Center for Urban Real Estate at the University of Illinois at Chicago.

Abstract
The paper presents a model of the market for commercial or industrial real estate at the local level that is used to derive an equation for the property tax rate that maximizes tax revenue – given that demand for real estate at the local level is highly elastic and capital is mobile in the long run.

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