Evidence on the Distributional Effects of a Land Value Tax on Residential Households

Summary

"Evidence on the Distributional Effects of a Land Value Tax on Residential Households" is a 2010 empirical study by Elizabeth Plummer, an accounting professor at the Neeley School of Business, Texas Christian University, published in the National Tax Journal (Vol. 63, No. 1, pp. 63–92, March 2010) — the flagship peer-reviewed journal of the National Tax Association, and the same venue that has carried the discipline's major site-value-taxation debates (see, e.g., this wiki's Brueckner (1986) and Zodrow (2001) pages). Using parcel-level appraisal data from Tarrant County, Texas (1997–2006) — a large, urbanized county that includes Fort Worth — Plummer simulates what would happen if the county replaced its uniform property tax with a revenue-neutral land value tax (LVT), and asks who would win and who would lose. Because it is a direct empirical simulation using real assessment records rather than a theoretical model or a stylized microsimulation, it is one of the more concrete pieces of U.S. evidence this wiki has on LVT incidence, and it complements the theory-driven case made elsewhere.

A related, more detailed June 2009 Lincoln Institute of Land Policy working paper by the same author, "Evidence on the Distributional Effects and Administrative Feasibility of a Land Value Tax: Who Wins, Who Loses, and Can It Happen?", covers the same Tarrant County data and adds a survey of Texas property appraisers on administrative feasibility; the published 2010 National Tax Journal article is the peer-reviewed, refined version of this work and is the version cited here. [VERIFY: the exact scope differences between the 2009 working paper and the 2010 journal article — this wiki could not directly fetch either full text in this research pass; findings below are drawn from the article's indexed abstract and multiple agreeing secondary summaries/quotations rather than a first-hand read of the complete text.]

The Core Findings

Plummer models a revenue-neutral shift from Tarrant County's existing uniform (improvement-plus-land) property tax to a tax on land value only, holding total local revenue constant, and compares the resulting tax burden across property classes and across residential properties of different value.

• Burden shifts away from single-family homes and onto other property classes. The central finding is that an LVT would shift the tax burden away from single-family residential properties and onto other classes of property (e.g., commercial and industrial parcels), because homes typically carry a lower land-value share of total assessed value than many commercial sites. For the more recent years in the sample, the study finds the average tax liability for single-family properties would fall by roughly 30 percent, and — notably — this decline held regardless of household income, i.e., it was not concentrated only among lower- or higher-income homeowners.
• Within residential properties, only "slightly more progressive." Using Suits Indices (a standard tax-progressivity measure, analogous to a Gini coefficient applied to tax burden against a base such as income or value), Plummer finds that within the residential class, an LVT would be slightly more progressive than the existing uniform property tax. This is a modest, incremental result, not a finding that LVT is strongly or dramatically progressive among homeowners.
• Horizontal-equity problems concentrate at the low end. The study also finds that horizontal-equity problems — i.e., similarly-situated properties ending up with dissimilar tax changes — would be greatest for the lowest-valued residential properties relative to other residential properties. This is a caution about winners and losers within the "homes benefit" story: not all homeowners gain equally, and the properties most likely to see erratic or inconsistent treatment are cheaper homes, not expensive ones.
• Capitalization effects. The paper also examines how the change would be expected to affect property values themselves through tax capitalization — the standard prediction that shifting tax burden onto land-value-heavy parcels lowers their after-tax value while shifting it away from others raises theirs — though this wiki has not independently verified the paper's specific capitalization estimates. [CITATION NEEDED: specific capitalization magnitudes from the paper.]

Relation to the Georgist Case

Plummer's study offers real-world, parcel-level American evidence that a revenue-neutral LVT would not simply penalize ordinary homeowners — indeed the opposite, since it finds the residential class as a whole would see lower average tax liability under an LVT, with the burden shifting to commercial/industrial land. That result speaks to a common objection that LVT would fall hard on homeowners (see Objection: LVT hurts the "asset-rich, cash-poor") and is broadly consistent with the Georgist expectation that land-value-heavy, high-value commercial sites bear more of the burden than typical single-family lots.

However, the paper's contribution to the progressivity case specifically — the outcome this page is filed under, Land value tax can be progressive — is narrower and more qualified than that outcome page's headline theoretical argument. The outcome page's main support (via Schwerhoff, Edenhofer & Fleurbaey (2022, IMF)) is a wealth-concentration argument: because land ownership is concentrated among the wealthy, taxing land should fall disproportionately on high-wealth households. Plummer's paper does not directly test that cross-household wealth-concentration mechanism; instead, it finds (a) a cross-class shift (residential losing share, non-residential gaining it) and (b) only a slight improvement in progressivity within the residential class by Suits Index, alongside a new equity concern — horizontal-equity problems concentrated among the lowest-valued homes, which cuts against, rather than for, a simple "LVT protects the less wealthy" story. This page therefore supports the progressivity outcome only in a qualified sense: real assessment data show LVT is not regressive relative to the existing property tax within the residential class, and burden shifts off homes generally — but the "slightly more progressive" magnitude is modest, geographically specific (one Texas county), and comes with a specific caveat about low-value-home horizontal equity that a fuller wiki treatment of the progressivity claim should carry alongside the wealth-concentration theory.

Nuances and Limits

• Single county, one U.S. state, one tax regime. The data cover Tarrant County, Texas, 1997–2006 — a single jurisdiction under Texas's specific property-tax and appraisal rules. Results depend on Tarrant County's actual land-to-improvement value ratios across property classes in that period and may not generalize to counties, states, or countries with different land/improvement ratios, zoning patterns, or assessment practices.
• "Slightly more progressive" is a modest claim, not a strong one. The paper's own language, as indexed and quoted across multiple sources, is that a residential LVT would be only slightly more progressive than the status quo by Suits Index — a genuine but modest improvement, not a demonstration that LVT is broadly redistributive within the homeowner population.
• New equity problem identified, not just resolved. The finding that horizontal-equity problems concentrate among the lowest-valued properties is itself a caution meriting attention alongside the progressivity result — it suggests LVT's within-class fairness effects are uneven rather than uniformly positive for less-well-off homeowners.
• A revenue-neutral simulation, not an implemented policy. Like most LVT distributional studies, this is a simulation of what an LVT would do to a real assessment roll, not an assessment of an LVT that was actually implemented and observed over time.
• Access limitation for this wiki pass. This wiki's automated fetch of the primary National Tax Journal PDF (via ntanet.org and the University of Chicago Press journals platform) did not succeed in this research session (redirect/404 and 403 responses), consistent with this environment's general difficulty reaching paywalled academic-publisher domains. The findings above are drawn from the article's publicly indexed abstract/summary (as surfaced via RePEc/IDEAS, the University of Chicago Press DOI listing, and a direct quotation captured via economicpossibility.org's source-library page) and multiple independently agreeing search-engine snippets, rather than a first-hand read of the complete article text. [VERIFY: a future editor with direct NTJ/JSTOR access should confirm the precise Suits Index values, exact income-decile breakdowns if reported, and full capitalization results against the primary text.]

Bears On

• Outcome: Land value tax can be progressive — provides real parcel-level U.S. evidence that a residential LVT is not regressive and shifts burden toward non-residential land, though the "slightly more progressive" finding is modest and should be read alongside the wealth-concentration theory, not as an independent strong confirmation of it.
• Objection: LVT hurts the "asset-rich, cash-poor" — the finding that residential tax liability falls roughly 30% on average, regardless of household income, is directly relevant evidence against the strongest form of this objection, though the horizontal-equity caveat for low-valued homes is a genuine complication worth noting on that page.
• Objection: LVT would hurt farmers and rural landowners — Plummer's cross-class shift finding (burden moving toward commercial/industrial land, generally the highest land-value-share class) is consistent with the existing case that low-land-value-share agricultural land bears little added burden, though this study does not itself analyze farmland specifically.
• Objection: Land value can't be assessed accurately — the paper's use of real land/improvement splits from a working U.S. appraisal district is a practical existence-proof that land value is already separately assessed for large numbers of parcels in at least one major American county.
• Concept: Land Value Tax

See Also

• Bowman & Bell (2008) — the replication/extension of England & Zhao on the same question
• Land value tax can be progressive
• Assessing the Distributional Impacts of a Land Value Tax (Common Wealth Canada)
• Schwerhoff, Edenhofer & Fleurbaey — Equity and Efficiency Effects of Land Value Taxation
• Objection: LVT hurts the "asset-rich, cash-poor"
• Land Value Tax
• Brueckner — A Modern Analysis of the Effects of Site Value Taxation

Sources

1. Elizabeth Plummer (2010), "Evidence on the Distributional Effects of a Land Value Tax on Residential Households," National Tax Journal 63(1): 63–92. DOI: 10.17310/ntj.2010.1.03 — used for the paper's title, venue, year, page range, and core findings (burden shift across property classes, ~30% average residential tax-liability decrease regardless of income, Suits Index "slightly more progressive" result, horizontal-equity concentration among lowest-valued properties). Findings verified via the article's publicly indexed abstract/summary rather than a directly fetched full text; see Nuances and Limits above.
2. Elizabeth Plummer (2009), "Evidence on the Distributional Effects and Administrative Feasibility of a Land Value Tax: Who Wins, Who Loses, and Can It Happen?", Lincoln Institute of Land Policy Working Paper. Lincoln Institute — used to confirm this is the same Tarrant County, TX (1997–2006) dataset as the 2010 journal article, in an earlier/fuller working-paper form that also covers administrative feasibility from Texas appraisers' perspective.
3. Economic Possibility Library (economicpossibility.org), source page for Plummer (2010). economicpossibility.org — used as a cross-check quoting the "slightly more progressive than a property tax" and horizontal-equity findings directly from the source.
4. National Tax Association / University of Chicago Press, National Tax Journal journal listing for Vol. 63, No. 1. journals.uchicago.edu — used to confirm journal identity and indexing.

[CITATION NEEDED: a directly fetched copy of the full National Tax Journal article text (via JSTOR, University of Chicago Press, or an author's institutional repository copy) to confirm exact Suits Index values, any income-decile-level breakdowns, and the paper's specific capitalization estimates — this session's automated fetches of ntanet.org, journals.uchicago.edu, and jstor.org all failed (404/403), consistent with this environment's general restrictions on paywalled academic-publisher domains.]