ABSTRACT
The purpose of this paper is to identify whether tax rate choices in the area-based tax system are perceived as an instrument prone to manipulation in accordance with election cycles. We use the unique cross-sectional panel data from 300 municipalities in 10 metropolitan areas in Poland over the period 2006–2015. We find clear evidence of the property tax policy cycle in all types of communes. Our results are in line with mainstream literature findings; however, because of a different institutional framework, this study brings new insights into area-based property tax systems prevailing in many developing and developed countries.
Acknowledgments
We would like to express our great appreciation to anonymous reviewers for their valuable and constructive comments during the manuscript review process.
We are particularly grateful for the support in solving econometric problems provided by Prof. dr hab. Jerzy Marzec from the Cracow University of Economics.
Disclosure Statement
No potential conflict of interest was reported by the authors.
Notes
1. We ran a Hausman test to decide whether a random-effect model is more suitable than a fixed-effect model. Based on the test results (p-value < 0.01), we rejected the null hypothesis and used a fixed-effect model (FE).