Public Policy

Tax Salience, Escrow, and Support for Property Tax

Authors

Abstract

Scholars find that tax presentation is a key factor influencing the salience of a tax to those who pay it. We test Cabral and Hoxby’s 2012 hypothesis that homeowners who escrow their property tax payments will express more support for property tax increases than non-escrow taxpayers. Using original data collected from a mailed survey of South Carolina voters our multi-variate regression analysis shows that homeowners who escrow property taxes express more support for increasing school tax than do non-escrow payers. We also find significant knowledge limits among respondents in understanding the actual school tax costs on taxpayers in South Carolina. Most S.C. homeowners are exempt from paying property taxes for school operations, but we find that this is not widely understood. Note: This project was funded by an ASPIRE I research grant from the Office of the Vice President of Research for the University of SC system.

Content

Thumbnail image of Young_ThornburgSPPCPaper22FINAL.pdf

Supplementary material

Thumbnail image of SPPC 22 Young_Thornburg_Appendix 1.pdf
SC School Tax Fact Sheet
Explains the tax-free status of primary residences from school millage in South Carolina.

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