Resource title

Income taxes, property values, and migration

Resource image

image for OpenScout resource :: Income taxes, property values, and migration

Resource description

We consider the effects of income redistribution when people can migrate from one country to another, and when land withineach 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.

Resource author

Amihai Glazer, Vesa Kanniainen, Panu Poutvaara

Resource publisher

Resource publish date

Resource language

eng

Resource content type

application/pdf

Resource resource URL

http://hdl.handle.net/10398/7689

Resource license

Check the according license before adaptation. When adapting give credits to the original author.