A general equilibrium analysis of property tax in Florida

This dissertation uses a general equilibrium model to analyze the effects of property tax policy on various industrial sectors of the economy and on the distribution of income. A general equilibrium model is an established methodology used to evaluate the impact of tax policy. The empirical basis for the model is a social accounting matrix that includes a production section transforming intermediate inputs, labor and capital factors into commodity output for the domestic and export market. The domestic commodities are allocated to intermediate inputs and final consumption by household groups, government and the investment sector.; The behavior of producers and consumers is described by the optimization of profit and utility functions subject to technological and income constraints. There are nine household groups distinguished by income and twelve industry sectors which include owner-occupied housing. The dissertation research consists of running counterfactual scenarios with the model. Each scenario represents an alternative treatment of the ad valorem property tax.; The general equilibrium model formulation with multiple economic agents and institutions permits the estimation of the detailed and systematic impacts of public policy. As with any positive economic approach, the evaluation of policy presents an objective assessment that gives support to decision making. An important conclusion of the research is that the total consumption by household groups as a welfare measure of the change in public policy indicates a clearly neutral impact. There are differences across income groups as to their consumption of owner-occupied housing. Another conclusion of the research is that there are significant differences in the productive output and use of factor inputs of the various industrial sectors. The change in tax policy also has a positive effect on the housing sector which is composed of owner-occupied housing and real estate which includes rentals.