Who bears the burden of a tax on land rent? Renters, landlords, or taxpayers?
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Suppose the city of Strelsau has a 10% property tax on rental properties. Rudolph makes $100,000 a year and pays $20,000 per year in rent. Fritz makes $40,000 per year and spends $10,000 in rent. Both Rudolph and Fritz rent from Michael. a. How is Strelsau's property tax best described? Progressive Incidental Proportional Regressive b. Who most likely actually pays the tax on rental property? The renters and landlord negotiate who will pay it. The renters, Rudolph and Fritz, pay it. The landlord, Micheal, pays it. It is split evenly between the renters and the landlord.
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Explain why a tax on land rent is efficient. Compare a tax on the land with a tax on the houses on the land.
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