This paper compares the distributional effects of changes, providing the same revenue, in the rates of the two main taxes available to Italian municipalities: the property tax (ICI) and the additional rate to the national personal income tax (IRPEF). The analysis is carried out using a recently developed microsimulation model, MAPP98, based on the micro data of the 1998 Bank of Italy Survey on Household Income and Wealth. Particular attention is devoted to the choice of the most appropriate welfare indicator: besides disposable equivalent household income, we also use the Indicator of Economic Situation (ISE), and propose a new welfare indicator. The analysis leads to the conclusion that, from a distributional perspective, the recourse to ICI is the better alternative; this result is mainly due to the different distributions across the population of real estate, subject to ICI, and of personal income, subject to IRPEF. Further, the number of households exempted from ICI is much greater than that of those who do not pay the personal income tax. Across demographic groups, the burden of ICI is relatively lower for small households, those with a young head and those of the employees. There is however a great dispersion in the results, which should suggest caution in evaluating the effects of the different policies here examined. The recourse to the property tax, for example, could have undesired consequences upon particular sectors of the population, for example house-holds with low incomes, but owners of the house of residence.