Revisiting the Excise Tax Effects of the Property Tax

The authors analyze the excise tax effects of a general property tax from the perspective of a small open economy facing a perfectly elastic supply of capital. The model differs from most that have appeared in the literature in the following ways: (1) the property tax is applied in a four-sector mod...

Full description

Saved in:
Bibliographic Details
Published in:Public finance review 2012-09, Vol.40 (5), p.555-583
Main Authors: Muthitacharoen, Athiphat, Zodrow, George R.
Format: Article
Language:English
Subjects:
Agriculture
Capital
Capital tax
Economic models
Elasticity
Excise taxes
Housing
Industry
Jurisdiction
Labor
Labour mobility
Land
Land use
Manufacturing
Open economies
Production
Property tax
Property taxes
Public finance
Sales taxes
Studies
Taxation
Taxation economics
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The authors analyze the excise tax effects of a general property tax from the perspective of a small open economy facing a perfectly elastic supply of capital. The model differs from most that have appeared in the literature in the following ways: (1) the property tax is applied in a four-sector model with three taxed sectors—manufacturing, housing, and services, and a tax-exempt agricultural sector. Only manufacturing and agriculture produce tradable goods; (2) the analysis considers an “intermediate run” time frame in which labor is perfectly mobile across production sectors but fixed within the jurisdiction, while land is fixed in each sector; and (3) all production sectors use capital, labor, and land. The authors find that the excise tax effects are borne primarily by labor and land. The results also indicate that the degree of backward tax-shifting declines markedly in a longer run time frame in which labor is perfectly mobile across jurisdictions.
ISSN:1091-1421
1552-7530
DOI:10.1177/1091142112448416