c. Suppose that the property tax is zero in all communities. Consider community is Leviathan mayor. If
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c. Suppose that the property tax is zero in all communities. Consider community i’s Leviathan mayor. If he raises ti above zero and uses the revenues only for political rents, what will have to be true about housing prices in community i after the tax is imposed (relative to before it is imposed)? Can you demonstrate how this comes about? (Hint: Consider the competitive pressure from household mobility.)
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Related Book For
Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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