Reexamination of Dynamic Efficiency with Taxation on Land

K-S. Kim and Jaewoo Lee

Working Papers from California Irvine - School of Social Sciences

Abstract: This paper examines the possibility of overaccumulation of capital in an overlapping generations economy with land. With zero population growth rate, the steady state equilibrium is dynamically efficient. Imposition of property tax on land, however, distorts the arbitrage condition and can generate dynamic inefficiency, whereas a tax on rental incomes or capital gains preserves dynamic efficiency. Even with a positive growth rate in population, property tax can still generate dynamic inefficiency.

Keywords: CAPITAL; LAND; FISCAL POLICY; PROPERTY TAX (search for similar items in EconPapers)
JEL-codes: D9 E62 O41 (search for similar items in EconPapers)
Pages: 13 pages
Date: 1996
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Journal Article: Reexamination of dynamic efficiency with taxation on land (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:calirv:96-97-03

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