Property taxes and dynamic inefficiency: A correction of a 'correction'

摘要

According to Homburg's (2014) comment on Kim and Lee (1997), a property tax cannot cause dynamic inefficiency in overlapping-generations models with land unless the tax "confiscates" the entire land rent. But then, Homburg claims, land would be intrinsically worthless and the market for land would be closed. The latter claim is invalid because, as a store of value, land can trade at a positive price even though its net return is negative. (C) 2020 Published by Elsevier B.V.