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Income Taxes, Property Values and Migration

Author Info

  • 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.

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File URL: http://ftp.iza.org/dp1889.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1889.

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Length: 18 pages
Date of creation: Dec 2005
Date of revision:
Publication status: published in: Journal of Public Economics, 2008, 92 (3-4), 915-923
Handle: RePEc:iza:izadps:dp1889
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Keywords: migration; land rents; property values; taxes; redistribution;

Other versions of this item:

Find related papers by 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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  7. Goodspeed, Timothy J., 1989. "A re-examination of the use of ability to pay taxes by local governments," Journal of Public Economics, Elsevier, vol. 38(3), pages 319-342, April.
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  12. Christiansen, Vidar & Hagen, Kare P & Sandmo, Agnar, 1994. " The Scope for Taxation and Public Expenditure in an Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(3), pages 289-309.
  13. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
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  18. Ellickson, Bryan, 1971. "Jurisdictional Fragmentation and Residential Choice," American Economic Review, American Economic Association, vol. 61(2), pages 334-39, May.
  19. Zodrow, George R., 2001. "The Property Tax as a Capital Tax: A Room with Three Views," National Tax Journal, National Tax Association, vol. 54(n. 1), pages 139-56, March.
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Cited by:

  1. Määttänen, Niku & Terviö, Marko, 2010. "Income Distribution and Housing Prices: An Assignment Model Approach," CEPR Discussion Papers 7945, C.E.P.R. Discussion Papers.
  2. Bach, Stefan & Corneo, Giacomo & Steiner, Viktor, 2011. "Optimal top marginal tax rates under income splitting for couples," CEPR Discussion Papers 8435, C.E.P.R. Discussion Papers.
  3. Marko Koethenbuerger, 2012. "Competition for Migrants in a Federation: Tax or Transfer Competition?," EPRU Working Paper Series 2012-01, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  4. Woohyung Lee & Byeongho Choe, 2012. "Agglomeration effect and tax competition in the metropolitan area," The Annals of Regional Science, Springer, vol. 49(3), pages 789-803, December.

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