Incidence and Economic Impacts of Property Taxes in Developing and Transitional Countries

54 Pages Posted: 8 Nov 2007

See all articles by Edward Sennoga

Edward Sennoga

Georgia State University - Department of Economics

David L. Sjoquist

Georgia State University

Sally Wallace

Georgia State University - Department of Economics; University of Pretoria

Date Written: November 2007

Abstract

In this paper, we revisit the theory of property tax incidence in light of the conditions in developing and transition countries by modifying the property tax incidence model to account for at least some of the specific conditions of these countries that are thought to affect property tax incidence. We develop and use a computable general equilibrium (CGE) model and test the impact of various assumptions regarding those specific issues that reflect the reality of property taxes in transition and developing countries. Our results indicate that the burden of property taxes imposed on capital and land is borne by the capitalists (owners of land and capital.) The property tax burden is progressive with the middle income and wealthy consumers bearing a heavier burden compared to the poor consumers. Further, the incidence patterns are largely unaffected by the different assumptions regarding the intranational and international mobility of capital. These findings are robust to alternative distributions of consumer incomes or factor endowments and factor intensities.

Suggested Citation

Sennoga, Edward and Sjoquist, David L. and Wallace, Sally, Incidence and Economic Impacts of Property Taxes in Developing and Transitional Countries (November 2007). Andrew Young School of Policy Studies Research Paper Series No. 07-36. Available at SSRN: https://ssrn.com/abstract=1028327 or http://dx.doi.org/10.2139/ssrn.1028327

Edward Sennoga (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-3818 (Phone)

David L. Sjoquist

Georgia State University ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-413-0246 (Phone)

HOME PAGE: http://frp.aysps.gsu.edu/sjoquist/index.html

Sally Wallace

Georgia State University - Department of Economics ( email )

Department of Economics
35 Broad Street, 6th Floor
Atlanta, GA 30303-3083
United States
(404) 413-0046 (Phone)

University of Pretoria ( email )

Physical Address Economic and Management Sciences
Pretoria, Gauteng 0002
South Africa

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