Property tax competition: A quantitative assessment

Rainald Borck, Jun Oshiro () and Yasuhiro Sato ()
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Jun Oshiro: University of the Ryukyus
Yasuhiro Sato: University of Tokyo

No 52, CEPA Discussion Papers from Center for Economic Policy Analysis

Abstract: We develop a model of property taxation and characterize equilibria under three alternative taxa-tion 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.

Keywords: property taxes; tax competition; efficiency (search for similar items in EconPapers)
JEL-codes: H71 H72 R13 R51 (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-ure
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https://doi.org/10.25932/publishup-56222 (application/pdf)

Related works:
Working Paper: Property Tax Competition: A Quantitative Assessment (2022)
Working Paper: Property Tax Competition: A Quantitative Assessment (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:pot:cepadp:52

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