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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 for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1889
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    References listed on IDEAS

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    1. Epple, Dennis & Platt, Glenn J., 1998. "Equilibrium and Local Redistribution in an Urban Economy when Households Differ in both Preferences and Incomes," Journal of Urban Economics, Elsevier, vol. 43(1), pages 23-51, January.
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    Cited by:

    1. Helmuth Cremer & Catarina Goulão, 2014. "Migration and Social Insurance," Recherches économiques de Louvain, De Boeck Université, vol. 80(1), pages 5-29.
    2. repec:gam:jsusta:v:9:y:2017:i:10:p:1872-:d:115537 is not listed on IDEAS
    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. Koethenbuerger, Marko, 2014. "Competition for migrants in a federation: Tax or transfer competition?," Journal of Urban Economics, Elsevier, vol. 80(C), pages 110-118.
    5. 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.
    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.

    More about this item

    Keywords

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

    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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