Distributional Consequences of Converting the Property Tax to a Land Value Tax

Summary

"Distributional Consequences of Converting the Property Tax to a Land Value Tax: Replication and Extension of England and Zhao" is a peer-reviewed article by John H. Bowman (then Professor of Economics, Virginia Commonwealth University, and a long-time state and local tax-policy consultant) and Michael E. Bell (Research Professor, George Washington Institute of Public Policy, and a veteran state/local public-finance economist), published in the National Tax Journal, Vol. 61, No. 4, Part 1 (December 2008), pp. 593–607 — the flagship peer-reviewed journal of the National Tax Association / International Institute of Public Finance tradition in US public finance. Bowman and Bell were also long-standing Lincoln Institute of Land Policy-affiliated researchers on land and property tax valuation, giving the paper institutional grounding beyond a single university.

The paper is explicitly a replication and extension of an earlier study by Richard England and Min Qiang Zhao, "Assessing the Distributive Impact of a Revenue-Neutral Shift from a Uniform Property Tax to a Two-Rate Property Tax with a Uniform Credit," National Tax Journal 58(2) (2005), pp. 247–260, which examined a hypothetical revenue-neutral shift from a uniform property tax to a pure land value tax in Dover, New Hampshire, and found the change would be regressive: it would shift tax burden toward lower-value residential properties (and thus, the paper argued, toward lower-income and asset-poor households) and away from higher-value properties. Bowman and Bell apply the same method to a different city — Roanoke, Virginia — using assessment microdata for 28,680 single-family residential parcels for the 2003 tax year, to test whether England and Zhao's regressivity finding was a general property of land value taxation or an artifact of Dover's specific housing stock and land-value distribution.

The Core Findings

• Opposite direction of result. Where England and Zhao found a revenue-neutral property-tax-to-LVT shift to be regressive in Dover, Bowman and Bell find the opposite result for Roanoke: a revenue-neutral shift to a pure land value tax on residential property is progressive there. [VERIFY: exact magnitude/elasticity figures from the full text — this pass relies on the RePEc/IDEAS abstract and multiple agreeing secondary summaries rather than a directly fetched full PDF, as journals.uchicago.edu and jstor.org both returned HTTP 403 during this research session.]
• Two measures of incidence. As in England and Zhao, Bowman and Bell measure incidence primarily by linking parcel-level property tax changes to assessed property value (a proxy for wealth). They extend the analysis by also linking the tax changes to U.S. Census Bureau income and poverty data at the census-tract level, testing incidence against income and poverty rates directly rather than only against property value.
• Progressive on both measures. By both measures, the Roanoke results point the same way: the hypothetical shift to a land value tax would disproportionately reduce tax burden in census tracts with lower median income and higher poverty rates, and increase it in wealthier tracts — i.e., a distributionally progressive result, contrary to Dover.
• Attributed to local housing-stock and land-value structure. The authors attribute the reversal to differences between Roanoke's and Dover's housing stock and the relationship between land value and improvement value across the income distribution — not to a flaw in England and Zhao's method. In Roanoke, lower-income/higher-poverty tracts appear to carry relatively less land value per parcel relative to total assessed value than is true in Dover, so a land-only tax base shifts relative burden away from them; in Dover the reverse pattern held. [CITATION NEEDED: the precise mechanism as stated in the authors' own words — full text not directly accessible this session.]

Relation to the Georgist Case

This paper is genuinely a mixed contribution to the wiki's progressivity case, and it should not be read as a simple confirmation. Its central empirical message is that the distributional effect of a property-tax-to-LVT shift is jurisdiction-dependent, not a fixed property of land value taxation in general. For Roanoke, Bowman and Bell's own results support land value tax can be progressive; but the very existence of this paper is a replication exercise built on a prior finding — England and Zhao (2005) on Dover, NH — that a similarly designed, revenue-neutral shift can instead be regressive. Read together, the two studies establish that whether a shift to LVT helps or hurts lower-income/lower-value-property households by this local-incidence method depends on the specific relationship between land value, improvement value, and income in the jurisdiction being taxed — a genuine complication for any unqualified claim that "LVT is progressive."

This sits alongside Common Wealth Canada's distributional modelling, which likewise found a national LVT alone could be regressive by current income absent a rebate, and against which a design fix (a flat credit) was needed to restore progressivity. Bowman and Bell's finding is different in kind — it is not about needing a rebate, but about the underlying incidence pattern varying by place — but the upshot for the wiki is the same: the progressivity outcome page's own caveat that "progressivity depends on design" should also be read as "and on local land-value/income structure," not only on policy design choices like exemptions or dividends.

Nuances and Limits

• Two data points, not a general law. The paper's own contribution is precisely that a single city's result (Dover) does not generalize; Roanoke's result does not generalize either. Bowman and Bell explicitly extended the test to two further Virginia localities — Chesterfield County (metropolitan, population then over 250,000) and Highland County (rural, population under 2,500) — in related work, and found that in both, a shift to LVT would decrease the share of taxes paid by residential property owners and increase the share paid by business property owners, a different but related distributional dimension (owner class rather than income). [VERIFY: whether this Chesterfield/Highland result appears within this same 2008 NTJ article or in a separate, closely related Bowman & Bell paper/report — sources found during this research session attribute it to Bowman & Bell's broader Virginia work but this pass could not confirm from primary text whether it is inside the 2008 NTJ article itself.]
• Incidence proxy, not a full tax-incidence model. Like England and Zhao, the method assumes the statutory/assessed burden change falls on the current owner (no explicit modelling of capitalization, tenant pass-through, or long-run supply response) and uses census-tract-level income/poverty as a proxy for household-level income, which can mask within-tract heterogeneity (e.g., asset-rich, cash-poor retirees within an otherwise low-income tract).
• Revenue-neutral, residential-only framing. The comparison is a hypothetical revenue-neutral swap confined to the residential property tax base in each city; it does not model a broader national LVT, does not net out effects on renters versus owners explicitly, and does not address commercial/industrial or agricultural land separately from the residential parcels studied.
• Single-year, single-city snapshots. Each city's result is based on one assessment year's cross-section (Roanoke: 2003) rather than a panel across years or a broader sample of cities, so neither this paper nor England and Zhao's supports a claim about the average or typical American city.

Bears On

• Outcome: A land value tax can be progressive — Bowman and Bell's Roanoke result is direct affirmative evidence for this outcome, but the paper's own reason for existing (replicating a regressive finding elsewhere) means it should be cited as jurisdiction-dependent support, not as a general proof.
• Research: Common Wealth Canada — distributional impacts of LVT — a parallel case where LVT-alone incidence also failed to be straightforwardly progressive without an added policy design element; read together they show two independent routes (place-dependence here; rebate-design there) by which "LVT is progressive" needs qualification.
• Research: Dye & England — Assessing the Theory and Practice of LVT — the standard Lincoln Institute policy-focus report surveying LVT theory and practice more broadly; this paper is a focused empirical complement on the specific distributional question.
• Objection: LVT hurts the "asset-rich, cash-poor" — the census-tract income/poverty proxy used here is directly relevant to, but does not resolve, concerns about household-level (rather than tract-level) hardship cases.
• Concept: Land Value Tax — a concrete empirical test of how a shift to this tax base plays out for real assessment rolls.

See Also

• Plummer (2010) — the closest companion distributional study
• England & Zhao (2005), the Dover NH study
• Land Value Tax
• A land value tax can be progressive
• Assessing the Distributional Impacts of a Land Value Tax (Common Wealth Canada)
• Assessing the Theory and Practice of LVT (Dye & England)
• Objection: LVT hurts the "asset-rich, cash-poor"

Sources

1. John H. Bowman & Michael E. Bell (2008), "Distributional Consequences of Converting the Property Tax to a Land Value Tax: Replication and Extension of England and Zhao," National Tax Journal 61(4), Part 1, pp. 593–607. IDEAS/RePEc record; DOI 10.17310/ntj.2008.4.02 — used for the paper's exact citation, methodology (28,680 Roanoke, VA parcels, 2003), and the headline progressive finding contrasted with Dover, NH. [VERIFY: full text not directly fetched this session — journals.uchicago.edu and jstor.org both returned HTTP 403; findings triangulated from the RePEc abstract plus multiple independent, agreeing search-engine summaries.]
2. Richard England & Min Qiang Zhao (2005), "Assessing the Distributive Impact of a Revenue-Neutral Shift from a Uniform Property Tax to a Two-Rate Property Tax with a Uniform Credit," National Tax Journal 58(2), pp. 247–260 — the original Dover, New Hampshire study that Bowman & Bell replicate and whose regressivity finding they contrast with their own Roanoke result. [CITATION NEEDED: a stable DOI/JSTOR link for this paper — not independently verified with a direct fetch this session; cited here on the basis of multiple agreeing secondary summaries naming it as the paper Bowman & Bell replicate.]
3. Common Wealth Canada, "Assessing the Distributional Impacts of a Land Value Tax," 2024 — wiki summary — used for the parallel point that LVT-alone incidence can fail to be progressive absent specific design choices.