Capitalization and tax exporting represent key economic adjustment mechanisms of fiscal policy. Capitalization of taxes and spending affects the tax base and thereby tax revenues, and endogenous tax base determination provides incentives for government be havior. The possibility of tax exporting may motivate inefficient tax design. The project investigates the role of capitalization and tax exporting in a dataset of housing prices, taxes and spending covering local governments in Norway since 1991. Compare d to studies of national governments, local governments offer much richer data to identify the importance of capitalization and tax exporting. The analyses include panel data analysis of capitalization and tax exporting, using tax/transfer reforms as natu ral experiments of capitalization, and the property tax reform of 2006 as natural experiment of tax reform.