Income Taxes, Property Values, and Migration
41 Pages Posted: 10 Nov 2003
Date Written: November 2003
We consider taxation by a Leviathan government and by a utilitarian government in the presence of heterogeneous locations within a country, when migration from one country to another is and is not possible. In a closed economy, a utilitarian government may transfer income from the poor to the rich to reduce rents earned by absentee landlords. When the rich are mobile, a tax on them induces little migration because the tax will reduce the rents on land inhabited by the rich. A race to the bottom need not appear.
Keywords: taxes, land rents, property values, migration, redistribution
JEL Classification: H21, H7 R21, R23
Suggested Citation: Suggested Citation