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On the Incentive Effects of Municipal Tax Credits

Author

Listed:
  • Philippe Cyrenne

    (University of Winnipeg)

  • Robert Fenton

    (University of Winnipeg)

Abstract

This article analyzes a specific municipal tax credit program that has been adopted by the city ofWinnipeg, Manitoba, Canada. The program allows 50% of the net private investment in eligible conservation work on a historic building to be designated as a nonrefundable tax credit against future municipal tax liabilities (property, business, amusement) on the structure and land on which it is situated. In the article, the authors show how an investor's expected tax liability affects the amount of expenditure undertaken. Specifically, the proposal introduces a nonlinear subsidy schedule that limits the total amount an investor's tax liability can be reduced. The authors conclude that the program is quite general and can be used by local governments to encourage spending in other areas, for example, energy conservation or general housing renewal.

Suggested Citation

  • Philippe Cyrenne & Robert Fenton, 2000. "On the Incentive Effects of Municipal Tax Credits," Public Finance Review, , vol. 28(3), pages 226-246, May.
    • Handle: RePEc:sae:pubfin:v:28:y:2000:i:3:p:226-246
    DOI: 10.1177/109114210002800305
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    References listed on IDEAS

    as
    1. Anderson, John E., 1993. "State tax credits and land use: Policy analysis of circuit-breaker effects," Resource and Energy Economics, Elsevier, vol. 15(3), pages 295-312, September.
    2. Man, Joyce Y., 1995. "The Incidence of Differential Commercial Property Taxes: Empirical Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(4), pages 479-496, December.
    3. Oded Palmon & Baron A. Smith, 1998. "New Evidence on Property Tax Capitalization," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 1099-1128, October.
    4. Ronald C. Fisher & Robert H. Rasche, 1984. "The Incidence and Incentive Effects of Property Tax Credits: Evidence From Michigan," Public Finance Review, , vol. 12(3), pages 291-319, July.
    5. Man, Joyce Y., 1995. "The Incidence of Differential Commercial Property Taxes: Empirical Evidence," National Tax Journal, National Tax Association, vol. 48(4), pages 479-96, December.
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    More about this item

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H0 - Public Economics - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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