Property Tax Competition: A Quantitative Assessment

Arbeitspapier

We develop a model of property taxation and characterize equilibria under three alternative taxation regimes often used in the public finance literature: decentralized taxation, centralized taxation, and "rent seeking" regimes. We show that decentralized taxation results in inefficiently high tax rates, whereas centralized taxation yields a common optimal tax rate, and tax rates in the rent-seeking regime can be either inefficiently high or low. We quantify the effects of switching from the observed tax system to the three regimes for Japan and Germany. The decentralized or rent-seeking regime best describes the Japanese tax system, whereas the centralized regime does so for Germany. We also quantify the welfare effects of regime changes.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 10002

Classification and Topics

• Classification: Wirtschaft ; State and Local Taxation, Subsidies, and Revenue ; State and Local Budget and Expenditures ; General Equilibrium and Welfare Economic Analysis of Regional Economies ; Finance in Urban and Rural Economies
• Subject: property taxes ; tax competition ; efficiency

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Borck, Rainald ; Oshiro, Jun ; Sato, Yasuhiro
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/267235
• Last update: 10.03.2025, 11:43 AM CET