Property tax limitations: An interpretative review

Limitations on aspects of property taxation are widespread in the United States with 43 states having some form of limit. Previous research hasfocused on a desire by local residents to constrain local government expenditures as the primary motivation for these limitations. Another common motivation for limitation measures, however, may be that property tax limits provide a form of insurance against unexpected increases in individual property tax liability. While a desire by local residents to constrain local government expenditures may exist, the need for insurance explains the presence of limitations in the absence of such desires.