According to a recent study by economists at UT Austin and Stanford University, a major reason why voters hate property taxes is because the tax burden is obvious, easy to calculate, and hard to avoid.
Marika Cabral and Caroline Hoxby argue that the property tax’s “salience,” or visibility, helps explain its unpopularity, its decline as a share of GDP, and the prevalence of property tax revolts.
Traditionally, property owners have paid property taxes by writing one or at most a few checks a year to a local taxing authority. The payment amounts are typically so large that a household must either save in advance or increase their debt in order to write the check. Cabral and Hoxby argue that this process makes the property tax very salient and that this salience affects the political economy of the tax.
To test their hypothesis, Cabral and Hoxby examined taxpayers who pay their property taxes through tax escrow. Through survey evidence, they demonstrate that people with tax escrow are significantly less aware of the property taxes they pay. They also find that areas in which the property tax is less salient are areas where property taxes are higher and property tax revolts are less likely to occur.
