TAX RATES AND TOTAL TAX REVENUES FROM LOCAL PROPERTY TAXES

This study provides a model for tax policy decision makers to maximize total tax revenue subject to typical external constraints. The model can then be used to analyze the trade-offs among property types (constituents) that are available. It verifies that due to inconsistent aggregation it is necessary to know the shape and curvature of the total tax revenue curve to solve for the optimal tax revenue condition. It is not sufficient to solve for singular optima for each type of property and then assume that an overall optima will occur by aggregating the individual optima The pseudoconcave properties of the individual tax entities do not necessarily aggregate into a pseudoconcave multiple function form, due to inconsistent aggregation, even under the simplified Cobb-Douglas function assumed in this study.