Can Local Tax Policy Be Efficient? Polish Communes' Agricultural Tax Policy

In this article we present the research of local agricultural tax policy in Poland. It is a specific kind of tax as its volume depends on an artificial measure, i.e. the price of rye. The article aims to find out if with this construction of tax the local tax policy may be efficient. Our research proves that the lower the share of agricultural tax in property taxes, the more efficient is the tax policy. The reduction in the agricultural tax correlates positively with the growth in agricultural tax in the current year, and also to a lesser extent in the next year. Higher rye prices result in an increased reduction in agricultural tax rates as well as in tax revenues, and the tendency is reversed in the following year.