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Income Taxes, Property Values, and Migration

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  • Amihai Glazer
  • Vesa Kanniainen
  • Panu Poutvaara

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Abstract

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.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2003/wp-cesifo-2003-11/cesifo1_wp1075.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1075.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_1075

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Keywords: taxes; land rents; property values; migration; redistribution;

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Cited by:
  1. Woohyung Lee & Byeongho Choe, 2012. "Agglomeration effect and tax competition in the metropolitan area," The Annals of Regional Science, Springer, Springer, vol. 49(3), pages 789-803, December.
  2. Marko Koethenbuerger, 2012. "Competition for Migrants in a Federation: Tax or Transfer Competition?," EPRU Working Paper Series, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics 2012-01, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  3. Bach, Stefan & Corneo, Giacomo & Steiner, Viktor, 2012. "Optimal top marginal tax rates under income splitting for couples," European Economic Review, Elsevier, Elsevier, vol. 56(6), pages 1055-1069.
  4. Määttänen, Niku & Terviö, Marko, 2010. "Income Distribution and Housing Prices: An Assignment Model Approach," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7945, C.E.P.R. Discussion Papers.

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