The formation and implementation of policy with regard to the property tax in our larger cities is of major importance not only for revenue raising and urban public finance, but also for the larger questions of urban politics and political economy. Diane Paul has written an important book which is of major relevance to all four of these topics: The Politics of the Property Tax (Lexington, Mass.: Lexington Books, 1975). Paul develops significant generalizations which are well grounded in rich empirical analysis and uses the tools of both political and economic analysis. The book's economic analysis and data provide the essential foundation for understanding this tax and urban revenue raising and public finance in general (e.g., analysis of the incidence of property tax and its degree of regressivity or progressivity). However, Paul goes beyond this to also explain the economic data by analysis of political and administrative behavior. For instance, in Chapter 4 the economic model of the property assessing process suggests that the city government acts like a monopolist protecting price discrimination, separating its market into different groups according to their price elasticity of demand for central city space. But Paul points out that the model does not fully explain the structure of assessing because officials also act from noneconomic motives. All of this is placed in the specific contexts of the organizations administering this tax and the type of political systems in the two cities analyzed.
Professor Paul found that in Boston and San Francisco (prior to the latter's "reform") there were informal tax structures in which commercial and industrial, and to a lesser extent income producing residential property, were "systematically assessed at higher ratios of market values than single family homes". 1 Her secondary analysis of other cities suggests that this may not be a unique pattern. These informal and extra-legal assessing structures, and especially the generally higher business property assessments, are maintained by negotiating tax abatements with the relatively small number of businesses which have the resources and incentives to challenge