Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267235 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10002
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
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.
Subjects: 
property taxes
tax competition
efficiency
JEL: 
H71
H72
R13
R51
Document Type: 
Working Paper
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