土地稅의 歸着

The Incidence of Land Taxed in the Presence of Bubbles on Land Price

This paper examines the effect of land taxes on the economy in terms of capital accumulation and land price. We consider a land tax as the tax on the asset bubbles on land price which is the discrepancy between the market value and the fundamentals of the land. Using the standard two-period overlapping generations model following Diamond(l965), we obtain the following results. First, if the capital market is stable and satisfies the Diamond stability condition and household saving is a normal good, a land tax increases the long run equilibrium capital accumulation. Second, a land tax decreases the bubbles on the land price. The policy implications of the results are as follows. The government had better increases the land tax rate to encourage the capital accumulation of the economy and/or to stabilize the land price. Thus, the current state of the Korean economy requires the reinforcement of the land tax system for efficiency as well as for equity considerations.