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Taxation of Land and Economic Growth

Author

Listed:
  • Shulu Che

    (Department of Global Business and Economics, Changwon National University, Changwon 51140, Korea)

  • Ronald Ravinesh Kumar

    (School of Accounting, Finance and Economics, Laucala Campus, The University of the South Pacific, Suva 40302, Fiji)

  • Peter J. Stauvermann

    (Department of Global Business and Economics, Changwon National University, Changwon 51140, Korea)

Abstract

In this paper, we theoretically analyze the effects of three types of land taxes on economic growth using an overlapping generation model in which land can be used for production or consumption (housing) purposes. Based on the analyses in which land is used as a factor of production, we can confirm that the taxation of land will lead to an increase in the growth rate of the economy. Particularly, we show that the introduction of a tax on land rents, a tax on the value of land or a stamp duty will cause the net price of land to decline. Further, we show that the nationalization of land and the redistribution of the land rents to the young generation will maximize the growth rate of the economy.

Suggested Citation

  • Shulu Che & Ronald Ravinesh Kumar & Peter J. Stauvermann, 2021. "Taxation of Land and Economic Growth," Economies, MDPI, vol. 9(2), pages 1-20, April.
    • Handle: RePEc:gam:jecomi:v:9:y:2021:i:2:p:61-:d:538068
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    References listed on IDEAS

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    Cited by:

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