Elgar original reference
Edited by Richard M. Bird and Enid Slack
Richard M. Bird and Enid Slack Taxes on land and property exist all over the world. In both principle and practice, these taxes can have important ﬁscal and non-ﬁscal effects. The revenue such taxes produce is often an important source of ﬁnance for local governments. In turn, the extent to which local governments have control over property taxes is often an important determinant of the extent to which they are able to make autonomous expenditure decisions. The level, design and control of property taxation are thus critical elements in effective decentralization policy in many countries. From a more general policy perspective, land and property taxes may be viewed as either equitable and efﬁcient ways of raising revenue or regressive and undesirable forms of public ﬁnance, depending upon one’s assumptions, the environment and how exactly the taxes are designed and applied. Deﬁnitive conclusions on these matters do not emerge easily from an examination of the complex structure of property taxes around the world. Consider, for example, the case of Germany, in which two variants of land tax are imposed on (in effect) four different bases at ﬁve different ‘base rates’ which in turn are modiﬁed by locally determined ‘leverage factors.’ Other than noting that the revenues from this complex set of taxes are small and that reform has proved politically impossible so far, it is hard to say anything very deﬁnite about the effects of such a system. Germany is not alone in this respect. Taxes...