Caplan (2001) shows that because land is a source of immobile wealth, local governments can use the property tax to avoid competitive pressures of the Tiebout model, allowing them to deviate from citizens' preferences. In this comment I show that the property tax is not the only tax local governments can use to avoid competitive pressure. Most taxes placed on property owners allow local governments to extract some rents despite perfect citizen mobility.
|Number of pages||5|
|State||Published - Sep 2004|