Revisiting the Excise Tax Effects of the Property Tax: Working Paper 2012-05

This paper analyzes the excise tax effects of a general property tax from the perspective of a small open economy facing a perfectly elastic supply of capital, focusing on the mix of forward tax-shifting to consumers and backward tax-shifting to labor and landowners. The model utilized differs from most that have appeared in the property tax literature as follows: (1) the property tax is applied in a four-sector model with three taxed sectors—manufacturing which produces a tradable good, housing and services which produce nontradable goods, and a tax-exempt agricultural sector that produces