Tax Motivated Takings

Thomas Miceli (), Kathleen Segerson () and C. F. Sirmans
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C. F. Sirmans: University of Connecticut

No 2007-43, Working papers from University of Connecticut, Department of Economics

Abstract: Tax motivated takings are takings by a local government aimed purely at increasing its tax base. Such an action was justified by the Supreme Court's ruling in Kelo v. New London, which allowed the use of eminent domain for a private redevelopment project on the grounds that the project promised spillover public benefits in the form of jobs and taxes. This paper argues that tax motivated takings can lead to inefficient transfers of land for the simple reason that assessed values understate owners' true values. We therefore propose a reassessment scheme that greatly reduces the risk of this sort of inefficiency.

Keywords: Eminent domain; holdout problem; property taxes; takings; urban redevelopment (search for similar items in EconPapers)
JEL-codes: H71 K11 R51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-law, nep-pbe and nep-ure
Date: 2007-11
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Persistent link: http://EconPapers.repec.org/RePEc:uct:uconnp:2007-43

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