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Excess Burden of the Property Tax: the Open Jurisdiction Case

Author

Listed:
  • A.F.Aisha Ghaus

    (Social Policy and Development Centre, Karachi, Pakistan)

  • Hafiz A. Pasha

    (Institute of Business Administration, Karachi, Pakistan)

Abstract

This article derives the general expression for the excess burden of the property tax in an open jurisdiction. The resulting expression corresponds to the loss of revenues resulting from the decline in structures and from contraction of city size. Also, it appears that if the land is municipally owned then there is no case for the imposition of the property tax. Simulations reveal that the marginal excess burden to revenue ratio rises exponentially and is sensitive to parameters like income level, nature of housing preferences, technology, and so on.

Suggested Citation

  • A.F.Aisha Ghaus & Hafiz A. Pasha, 1996. "Excess Burden of the Property Tax: the Open Jurisdiction Case," Public Finance Review, , vol. 24(1), pages 120-128, January.
    • Handle: RePEc:sae:pubfin:v:24:y:1996:i:1:p:120-128
    DOI: 10.1177/109114219602400108
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    References listed on IDEAS

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    1. Arnott, Richard J. & MacKinnon, James G., 1977. "The effects of the property tax: A general equilibrium simulation," Journal of Urban Economics, Elsevier, vol. 4(4), pages 389-407, October.
    2. Wheaton, William C., 1974. "A comparative static analysis of urban spatial structure," Journal of Economic Theory, Elsevier, vol. 9(2), pages 223-237, October.
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