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Income Taxes, Property Values and Migration

Author

Listed:
  • Glazer, Amihai

    (University of California, Irvine)

  • Kanniainen, Vesa

    (University of Helsinki)

  • Poutvaara, Panu

    (University of Munich)

Abstract

We consider taxation by a utilitarian government in the presence of heterogeneous locations within a country. We show that a utilitarian government never equalizes after-tax incomes, even when it can impose group-specific lump-sum taxes. If migration is impossible, a utilitarian government 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.

Suggested Citation

  • Glazer, Amihai & Kanniainen, Vesa & Poutvaara, Panu, 2005. "Income Taxes, Property Values and Migration," IZA Discussion Papers 1889, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1889
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    2. Helmuth Cremer & Catarina Goulão, 2014. "Migration and Social Insurance," Recherches économiques de Louvain, De Boeck Université, vol. 80(1), pages 5-29.
    3. Määttänen, Niku & Terviö, Marko, 2014. "Income distribution and housing prices: An assignment model approach," Journal of Economic Theory, Elsevier, vol. 151(C), pages 381-410.
    4. Bartels, Charlotte & Neumann, Dirk, 2021. "Redistribution and Insurance in Welfare States around the World," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 123(4), pages 1116-1158.
    5. Changkeun Lee & Euijune Kim, 2017. "Mobility of Workers and Population between Old and New Capital Cities Using the Interregional Economic Model," Sustainability, MDPI, vol. 9(10), pages 1-15, October.
    6. Woohyung Lee & Byeongho Choe, 2012. "Agglomeration effect and tax competition in the metropolitan area," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 789-803, December.
    7. Janeba, Eckhard & Schulz, Karl, 2023. "Nonlinear taxation and international mobility in general equilibrium," Journal of Public Economics, Elsevier, vol. 218(C).
    8. Bach, Stefan & Corneo, Giacomo & Steiner, Viktor, 2012. "Optimal top marginal tax rates under income splitting for couples," European Economic Review, Elsevier, vol. 56(6), pages 1055-1069.

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    Keywords

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    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • 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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