Income taxes, property values, and migration
AbstractWe consider the effects of income redistribution when people can migrate from one country to another, and when land within each country is heterogeneous. Taxes related to income can then affect property values, and can induce migration, which further affects property values. We show that under these conditions a utilitarian government should never equalize after-tax incomes. If migration is impossible, it may even transfer income from the poor to the rich, reducing the rents earned by absentee landlords. The redistributive tax on the rich may be higher or lower when the rich can migrate than when they cannot. A Rawlsian government in the absence of mobility will equalize after-tax incomes. Under mobility, Rawlsian governments cut their taxes if and only if the relative pre-tax income of the poor is sufficiently low.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 92 (2008)
Issue (Month): 3-4 (April)
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Web page: http://www.elsevier.com/locate/inca/505578
Other versions of this item:
- Glazer, Amihai & Kanniainen, Vesa & Poutvaara, Panu, 2005. "Income Taxes, Property Values and Migration," IZA Discussion Papers 1889, Institute for the Study of Labor (IZA).
- Amihai Glazer & Vesa Kanniainen & Panu Poutvaara, 2003. "Income Taxes, Property Values, and Migration," CESifo Working Paper Series 1075, CESifo Group Munich.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
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