Question

Consider the homogenous jurisdictions created through Voting With One's Feet. How would moving from a flat 'Head' tax to a proportional property tax change this outcome?

Answer 1

Homogeneous jurisdictions created through voting with one feet :-

Voting with one feet means showing that you support something by leaving that place . People are moving from one state to another which are relatively more economically vibrant ,dynamic and business friendly with lower tax and regulatory burden and more economic and job opportunities .

This forms a cluster of individuals who do not support a certain tax system which leads to vast movement in a particular geographical area by particular types of individuals.

Movement from head tax to proportional tax :-

Usually this movement is especially made by low income individuals who have bigger families and poor conditions of living .

When flat per head tax is charged from them ,they start feeling a sense of discrimination as the richer own larger proportion of lands but have smaller families , thus their share is also less in the taxes .

On the other hand , the low income individuals pay a higher portion in taxes despite of owning fewer land .

The only solution to this problem is to change taxes according to the proportion of property owned by each individual.

Advantage of shift to proportional property tax :-

1) Reducing the burden of low income people

2) Establishing equity between rich and poor .

3) Reducing the gap between rich and poor

4) Checking on the individuals who are holding substantially very large area of property and charging tax accordingly.