Property Tax on Privatized Roads

11 Pages Posted: 8 Jan 2011 Last revised: 21 Jan 2011

Jason Junge

University of Minnesota - Twin Cities

David Matthew Levinson

affiliation not provided to SSRN

Date Written: July 31, 2010

Abstract

Roads cover a significant fraction of the land area in many municipalities. The public provision of roads means this land is exempt from the local property tax. Transferring roads from public to private ownership would not only remove maintenance costs from city budgets, but increase potential property tax revenue as well. This paper calculates the value of the land occupied by roads in sample cities and determines the potential revenue increase if they were subject to property tax. Further calculation computes the extent to which the property tax rate could be reduced if the land value of roads were added to the tax base. Property tax on privatized roads could generate meaningful revenue, but a corresponding reduction in rate for existing property would be small.

Keywords: Roads, Privatization, Tax, Public, Property Tax

JEL Classification: R40, R41, H20

Suggested Citation

Junge, Jason and Levinson, David Matthew, Property Tax on Privatized Roads (July 31, 2010). Available at SSRN: https://ssrn.com/abstract=1736061 or http://dx.doi.org/10.2139/ssrn.1736061

Jason Junge

University of Minnesota - Twin Cities ( email )

420 Delaware St. SE
Minneapolis, MN 55455
United States

David Matthew Levinson (Contact Author)

affiliation not provided to SSRN

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