The Political Effects of Local Property Taxation in Norway

The property taxation is perhaps the most controversial policy issue in Norwegian local authorities. Municipalities enjoy autonomy to decide whether or not to introduce property taxation. However, national legislation sets limits on property tax rates. The conflict over the property taxation follows the traditional left-right ideological division. This study analyses whether the introduction of property taxation in individual municipalities leads to political repercussions for the pro-tax parties in terms of weakened voter support. By using the data from the 2003 and 2007 local elections, the analysis reveals that, contrary to our expectations, the support for the left-wing parties is stronger in the municipalities that have introduced such taxes than in other municipalities. There are no signs that the pro-tax parties are being punished by the voters. To the extent that there are any such negative repercussions, it seems that the right-wing anti-tax parties suffer vote losses, but these losses are moderate.