Restraining the Leviathan: property tax limitation in Massachusetts

Proposition 2 1/2, a ballot initiative passed in Massachusetts in 1980, sha rply reduced local property taxes. We examine why voters supported Proposit ion 2 1/2, using data on votes for the Proposition and for overrides of it a decade later. We find two reasons for the Proposition's support: people p erceived agency losses from the difficulty of monitoring government, and pe ople judged government to be inefficient because their tax burden was high. By the 1990s, people either regretted the severity of the Proposition's co nstraints or felt that its mission was accomplished. Voters in communities with larger initial tax cuts supported significantly more overrides. (C) 19 99 Elsevier Science S.A. All rights reserved. JEL classification: H1; H7; K 0.