Introduction of a Local Real Estate Tax in Croatia: A Survey of Expert and Public Opinion
DOI:
https://doi.org/10.4335/14.1.53-74(2016)Keywords:
real estate tax, expert opinion survey, public opinion survey, CroatiaAbstract
This paper presents the results of surveys of both expert and public opinion regarding the introduction of a local real estate tax in Croatia. The methodology encompasses descriptive statistics and two models (the PLS-SEM and the binomial probit regression model). Support for the introduction of the real estate tax is stronger among the experts than the general public. However, the experts differ on professional lines, with faculty specialized in economics from departments of finance and accounting generally being against the tax. Both models reveal positive relationships between support for the tax and support for more equitable taxation. Meanwhile, the broader expert model is, besides profession and equity, also negatively influenced by attitudes in favour of lower taxation costs and positively influenced by attitudes in favour of property being an adequate indicator of ability to pay and of the need to tax capital income. The public opinion model is positively influenced by equity and negatively influenced by negative expectations about the abolition of existing real estate user charges and taxes. Work status is also relevant.
References
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Bird, R. (2011) Subnational taxation in Developing Countries: A Review of the Literature, Journal of International Commerce, Economics and Policy, 2(1), pp. 1-23, doi: 10.1142/S1793993311000269.
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Blažić, H. & Grdinić, M. (2012) Porez na imovinu u EU, In: Prohaska, Z. (ed.) Financijska tržišta i institucije Republike Hrvatske u procesu uključivanja u Europsku uniju (Rijeka: Ekonomski fakultet), pp. 71-91.
Blažić, H., Šimović, H. & Štambuk, A. (2014) Mjesto socijalne politike u poreznoj politici RH: Anketa poreznih stručnjaka, Revija za socijalnu politiku, 21(3), pp. 327-360. doi: 10.3935/rsp.v21i3.1216.
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Cabral, M. & Hoxby, C. (2012) The Hated Property Tax: Salience, Tax Rates, and Tax Revolts, NBER Working Paper, 18514 (Cambridge, MA: National Bureau of Economic Research).
Carroll, R. J. & Yinger, J. (1994) Is the Property Tax a Benefit Tax? The Case of Rental Housing, National Tax Journal, 47(2), pp. 295-316.
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Cole, R. L. & Kincaid, J. (2006) Public Opinion on U.S. Federal and Intergovernmental Issues in 2006: Continuity and Change, Publius, 36(3), pp. 443-459, doi: 10.1093/publius/pjj024.
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Fatur, T. & Žiković, S. (2009) Porez na imovinu u Republici Hrvatskoj – Stvarnost ili mit. Računovodstvo, revizija i financije, 11, pp. 112-120.
Fornell, C. & Larcker, D. F. (1981) Structural equation models with unobservable variables and measurement error: Algebra and statistics, Journal of marketing research, 18(3), pp. 382-388.
Garnier, G., György, E., Heineken, K., Mathé, M., Puglisi, L., Ruà, S., Skonieczna, A. & Van Mierlo, A. (2014) A wind of change? Reforms of Tax Systems since the launch of Europe 2020, EC Taxation paper, No 49 (Luxembourg: European Commission).
Grégoire, Y. & Fisher, R. J. (2006) The effects of relationship quality on customer retaliation, Marketing Letters, 17(1), pp. 31-46.
Hair Jr, J. F., Hult, G. T. M., Ringle, C. & Sarstedt, M. (2013) A primer on partial least squares structural equation modeling (PLS-SEM) (Thousand Oaks: SAGE).
Hammar, H., Jagers, C.J. & Nordblom, K. (2008) Attitudes towards Tax Levels: A Multi-Tax Comparison, Fiscal Studies, 29(4), pp. 523-543.
Henseler, J., Ringle, C. M. & Sinkovics, R. R. (2009) The use of partial least squares path modeling in international marketing, Advances in international marketing, 20, pp. 277-319.
Hills, J. (2013) Safeguarding social equity during fiscal consolidation: Which tax bases to use?, In: Princen, S. & Mourre, G. (ed.) The role of tax policy in times of fiscal consolidation, European Economy, Economic Papers 502 (Brussels: European Commission), pp.80-93.
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Johansson, Å., Heady, C., Arnold, J. M., Brys, B. & Vartia, L (2008) Taxation and Economic Growth. OECD Economics Department Working Papers, No. 620 (Paris: OECD).
Kesner-Škreb, M. (2009) What should one know about immovable property taxation in Croatia?, Newsletter Institute of Public Finance, 46, pp. 1-7.
Kesner-Škreb, M. (2012) Much ado about nothing – three questions about immovable property taxation in Croatia. Newsletter Institute of Public Finance, 66, pp 1-7.
Kordić, G. & Podborkić, R. (2010) Oporezivanje imovine: hrvatska praksa i europska iskustva. Ekonomska misao i praksa, 19(1), pp. 105-120.
Kukić, N. & Švaljek, S. (2012) Porez na nekretnine: osnovne značajke i rasprava o uvođenju u Hrvatskoj, Privredna kretanja i ekonomska politika, 22(32), pp. 49-90.
Lim, D., Slemrod, J. & Wilking, E. (2013) Expert and public attitudes towards tax policy: 2013, 1994, and 1934, National Tax Journal, 66(4), pp. 775-806.
McCluskey, W. J. & Plimmer, F. (2011) The Creation of Fiscal Space for the Property Tax: The Case of Central and Eastern Europe, International Journal of Strategic Property Management, 15 (2), pp.123-138.
Malme, J & Youngman, J. (2004) The Property Tax in a new Environment: Lessons from International Tax Reform Efforts, Working Paper, No. 04-49 (Atlanta: International Studies Program of the Andrew Young School of Policy Studies).
Ministarstvo financija (2012) Nacrt prijedloga Zakona o porezu na nekretnine (Zagreb: Mistarstvo financija).
Ministarstvo financija (2013) Iskaz o procjeni učinaka propisa za prijedlog zakona o porezu na nekretnine (Zagreb: Ministarstvo financija).
Mitrović, D. & Žibrik, N. (2012) Development and enforcement of a market based massed valuation system for real property in Slovenia, In: Gayer, C. & Mourre, G. (ed.) Property taxation and enhanced tax administration in challenging times, European Economy, Economic Papers, No 463 (Bruxelles: European Commission), pp. 46-50.
National Public Radio/Kaiser Family Foundation/Kennedy School of Government (2003) National Survey of Americans’ Views on Taxes (Cambridge, MA: John F. Kennedy School of Government).
Norregaard, J. (2013) Taxing Immovable Property.Revenue Potential and Implementation Challenges, IMF Working Paper, 13/129 (Washington, DC: IMF).
Oates, W. E. (1999) Local Property Taxation: An Assessment, Land Lines: Newsletter of the Lincoln Institute of Land Policy, 11(3), pp.1-3.
OECD (2010) Tax Policy Reform and Economic Growth, OECD Tax Policy Study, No. 20 (Paris: OECD).
Posedel, P. & Vizek, M. (2011) Are house prices characterised by threshold effects? Evidence from developed and post-transition countries, Czech Journal of Economics and Finance (Finance a uver), 61(6), pp. 584-600.
Rašić Bakarić, I. (2014) Osnovne značajke poreza na nekretnine: njegova primjena u Hrvatskoj i ostalim zemljama članicama Europske unije, Ekonomski pregled, 65(5), pp. 385-415.
Ringle, C. M., Wende, S. & Becker, J. M. (2014) Smartpls 3 (Hamburg: SmartPLS).
Šimović, H., Blažić, H. & Štambuk, A. (2014) Perspectives of tax reforms in Croatia: expert opinion survey, Financial Theory and Practice, 38(4), pp. 405-439, doi: dx.doi.org/10.3326/fintp.38.4.2.
Šimović, J. (1989) Porezni sistem i porezna politika općina u Jugoslaviji (Zagreb: Institut za javne financije).
Slemrod, J. (1995) Professional opinions about tax policy: 1994 and 1934, National Tax Journal, 48(1), pp. 121-147.
Vlada RH (2011) Program Vlade Republike Hrvatske za mandat 2011.-2015 (Zagreb: Vlada RH).
Vlahović Žuvela, E. (2014) Porez na imovinu tek 2020, Interview with minister Boris Lalovac, Banka, 20(5), pp. 16-26.
Xing, J. (2011) Does tax structure affect economic growth? Empirical evidence from OECD countries, Oxford University for Business Taxation Working Paper, No. 11/20 (Oxford: Oxford University).
Xing, J., (2012) Tax structure and growth: How robust is the empirical evidence?, Economics Letters, 117(1), pp. 379-382.</span></p>
Arnold, J. (2008) Do Tax Structures Affect Aggregate Economic Growth?: Empirical Evidence from a Panel of OECD Countries, OECD Economics Department Working Papers, No. 643 (Paris: OECD).
Arnold, J. M., Brys, B., Heady, C., Johansson, A., Schwellnus, C. & Vartia, L. (2011) Tax Policy for Economic Recovery and Growth, Economic Journal, 121(550), pp. F59–F80, doi: 10.1111/j.1468-0297.2010.02415.x.
Ashworth, J. & Heyndels, B. (1997) Politicians' Preferences on Local Tax Rates: An Empirical Analysis, European Journal of Political Economy, 13(3), pp. 479-502.
Bahl, R. & Martinez-Vasquez, J. (2007) The Property Tax in Developing Countries. Current Practice and Prospects, Lincoln Institute of Land Policy Working Paper, WP07RB1 (Cambridge, MA: Lincoln Institute of Land Policy).
Bahl R. & Bird, R. (2008) Subnational Taxes in Developing Countries: The Way Forward, Public Budgeting & Finance, 28(4), pp. 1–25, doi: 10.1111/j.1540-5850.2008.00914.x.
Bahl, R. (2013) A Retrospective on Taxation in Developing Countries: Will the Weakest Link be Strengthened?, International Center for public Policy Working Paper, 13-18 (Atlanta, GA: International Center for Public Policy).
Bird, R. (2011) Subnational taxation in Developing Countries: A Review of the Literature, Journal of International Commerce, Economics and Policy, 2(1), pp. 1-23, doi: 10.1142/S1793993311000269.
Bird, R. M. & Slack, E. (eds.) (2004) International Handbook of Land and Property Taxation (Cheltenham, UK: Edward Elgar).
Blažić, H. & Grdinić, M. (2012) Porez na imovinu u EU, In: Prohaska, Z. (ed.) Financijska tržišta i institucije Republike Hrvatske u procesu uključivanja u Europsku uniju (Rijeka: Ekonomski fakultet), pp. 71-91.
Blažić, H., Šimović, H. & Štambuk, A. (2014) Mjesto socijalne politike u poreznoj politici RH: Anketa poreznih stručnjaka, Revija za socijalnu politiku, 21(3), pp. 327-360. doi: 10.3935/rsp.v21i3.1216.
Brannon, G.M. (1995) What will the “NTA Opinions” have to do with Federal Tax policy – 1995-6., National Tax Journal, 48(1), pp. 149-154.
Cabral, M. & Hoxby, C. (2012) The Hated Property Tax: Salience, Tax Rates, and Tax Revolts, NBER Working Paper, 18514 (Cambridge, MA: National Bureau of Economic Research).
Carroll, R. J. & Yinger, J. (1994) Is the Property Tax a Benefit Tax? The Case of Rental Housing, National Tax Journal, 47(2), pp. 295-316.
Chin, W. W. (1998) The partial least squares approach to structural equation modelling, In Marcoulides, G. A. (ed.) Modern methods for business research (Mahwah, NJ: Lawrence Erlbaum Associates), pp. 295–336.
Coda Moscarola, F., Columbino, U., Figari, F. & Locatelli, M. (2015) Shifting Taxes from Labour to Property. A Simulation under Labour Market Equilibrium, IZA Discussion Paper, No. 8832 (Essex: Institute for Social and Economic Research).
Cole, R. L. & Kincaid, J. (2006) Public Opinion on U.S. Federal and Intergovernmental Issues in 2006: Continuity and Change, Publius, 36(3), pp. 443-459, doi: 10.1093/publius/pjj024.
European Commission (2012) Possible reforms of real estate taxation: criteria for successful policies, European Economy Occasional Papers, No. 119 (Luxembourg: European Commission).
European Commission (2014a) Taxation trends in the European Union, 2014 edition (Luxembourg: European Commission).
European Commission (2014b) Tax Reforms in EU Member States 2014 (Luxembourg: European Commission).
Fatur, T. & Žiković, S. (2009) Porez na imovinu u Republici Hrvatskoj – Stvarnost ili mit. Računovodstvo, revizija i financije, 11, pp. 112-120.
Fornell, C. & Larcker, D. F. (1981) Structural equation models with unobservable variables and measurement error: Algebra and statistics, Journal of marketing research, 18(3), pp. 382-388.
Garnier, G., György, E., Heineken, K., Mathé, M., Puglisi, L., Ruà, S., Skonieczna, A. & Van Mierlo, A. (2014) A wind of change? Reforms of Tax Systems since the launch of Europe 2020, EC Taxation paper, No 49 (Luxembourg: European Commission).
Grégoire, Y. & Fisher, R. J. (2006) The effects of relationship quality on customer retaliation, Marketing Letters, 17(1), pp. 31-46.
Hair Jr, J. F., Hult, G. T. M., Ringle, C. & Sarstedt, M. (2013) A primer on partial least squares structural equation modeling (PLS-SEM) (Thousand Oaks: SAGE).
Hammar, H., Jagers, C.J. & Nordblom, K. (2008) Attitudes towards Tax Levels: A Multi-Tax Comparison, Fiscal Studies, 29(4), pp. 523-543.
Henseler, J., Ringle, C. M. & Sinkovics, R. R. (2009) The use of partial least squares path modeling in international marketing, Advances in international marketing, 20, pp. 277-319.
Hills, J. (2013) Safeguarding social equity during fiscal consolidation: Which tax bases to use?, In: Princen, S. & Mourre, G. (ed.) The role of tax policy in times of fiscal consolidation, European Economy, Economic Papers 502 (Brussels: European Commission), pp.80-93.
IMF (2013) Fiscal monitor: Taxing Times (Washington D.C.: IMF).
Johansson, Å., Heady, C., Arnold, J. M., Brys, B. & Vartia, L (2008) Taxation and Economic Growth. OECD Economics Department Working Papers, No. 620 (Paris: OECD).
Kesner-Škreb, M. (2009) What should one know about immovable property taxation in Croatia?, Newsletter Institute of Public Finance, 46, pp. 1-7.
Kesner-Škreb, M. (2012) Much ado about nothing – three questions about immovable property taxation in Croatia. Newsletter Institute of Public Finance, 66, pp 1-7.
Kordić, G. & Podborkić, R. (2010) Oporezivanje imovine: hrvatska praksa i europska iskustva. Ekonomska misao i praksa, 19(1), pp. 105-120.
Kukić, N. & Švaljek, S. (2012) Porez na nekretnine: osnovne značajke i rasprava o uvođenju u Hrvatskoj, Privredna kretanja i ekonomska politika, 22(32), pp. 49-90.
Lim, D., Slemrod, J. & Wilking, E. (2013) Expert and public attitudes towards tax policy: 2013, 1994, and 1934, National Tax Journal, 66(4), pp. 775-806.
McCluskey, W. J. & Plimmer, F. (2011) The Creation of Fiscal Space for the Property Tax: The Case of Central and Eastern Europe, International Journal of Strategic Property Management, 15 (2), pp.123-138.
Malme, J & Youngman, J. (2004) The Property Tax in a new Environment: Lessons from International Tax Reform Efforts, Working Paper, No. 04-49 (Atlanta: International Studies Program of the Andrew Young School of Policy Studies).
Ministarstvo financija (2012) Nacrt prijedloga Zakona o porezu na nekretnine (Zagreb: Mistarstvo financija).
Ministarstvo financija (2013) Iskaz o procjeni učinaka propisa za prijedlog zakona o porezu na nekretnine (Zagreb: Ministarstvo financija).
Mitrović, D. & Žibrik, N. (2012) Development and enforcement of a market based massed valuation system for real property in Slovenia, In: Gayer, C. & Mourre, G. (ed.) Property taxation and enhanced tax administration in challenging times, European Economy, Economic Papers, No 463 (Bruxelles: European Commission), pp. 46-50.
National Public Radio/Kaiser Family Foundation/Kennedy School of Government (2003) National Survey of Americans’ Views on Taxes (Cambridge, MA: John F. Kennedy School of Government).
Norregaard, J. (2013) Taxing Immovable Property.Revenue Potential and Implementation Challenges, IMF Working Paper, 13/129 (Washington, DC: IMF).
Oates, W. E. (1999) Local Property Taxation: An Assessment, Land Lines: Newsletter of the Lincoln Institute of Land Policy, 11(3), pp.1-3.
OECD (2010) Tax Policy Reform and Economic Growth, OECD Tax Policy Study, No. 20 (Paris: OECD).
Posedel, P. & Vizek, M. (2011) Are house prices characterised by threshold effects? Evidence from developed and post-transition countries, Czech Journal of Economics and Finance (Finance a uver), 61(6), pp. 584-600.
Rašić Bakarić, I. (2014) Osnovne značajke poreza na nekretnine: njegova primjena u Hrvatskoj i ostalim zemljama članicama Europske unije, Ekonomski pregled, 65(5), pp. 385-415.
Ringle, C. M., Wende, S. & Becker, J. M. (2014) Smartpls 3 (Hamburg: SmartPLS).
Šimović, H., Blažić, H. & Štambuk, A. (2014) Perspectives of tax reforms in Croatia: expert opinion survey, Financial Theory and Practice, 38(4), pp. 405-439, doi: dx.doi.org/10.3326/fintp.38.4.2.
Šimović, J. (1989) Porezni sistem i porezna politika općina u Jugoslaviji (Zagreb: Institut za javne financije).
Slemrod, J. (1995) Professional opinions about tax policy: 1994 and 1934, National Tax Journal, 48(1), pp. 121-147.
Vlada RH (2011) Program Vlade Republike Hrvatske za mandat 2011.-2015 (Zagreb: Vlada RH).
Vlahović Žuvela, E. (2014) Porez na imovinu tek 2020, Interview with minister Boris Lalovac, Banka, 20(5), pp. 16-26.
Xing, J. (2011) Does tax structure affect economic growth? Empirical evidence from OECD countries, Oxford University for Business Taxation Working Paper, No. 11/20 (Oxford: Oxford University).
Xing, J., (2012) Tax structure and growth: How robust is the empirical evidence?, Economics Letters, 117(1), pp. 379-382.</span></p>
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2016-01-02
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