Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230970
Authors: 
Hellwig, Martin
Year of Publication: 
2020
Series/Report no.: 
Discussion Papers of the Max Planck Institute for Research on Collective Goods No. 2020/15
Abstract: 
According to Homburg's (2014) comment on Kim and Lee (1997), an ad-valorem property tax on land cannot cause dynamic ineffi ciency of equilibrium allocations in an overlapping-generations model unless the tax is "confiscatory", i.e., equal to or greater than land rents. With such a tax, Homburg claims, land would be intrinsically worthless and the market for land would be closed. The latter claims are invalid because, as a store of value, land can be traded at a positive price even if the net rate of return on land is negative.
Subjects: 
Property taxes
dynamic inefficiency
overaccumulation of capital
land
JEL: 
D9
E62
H21
Document Type: 
Working Paper

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