Ch17 - Chapter 17 Taxes on Wealth Property and Estates 1 A Comprehensive Wealth Tax Base Real Property is property such as land and the structures

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1 Chapter 17 Taxes on Wealth Property and Estates
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2 A Comprehensive Wealth Tax Base Real Property is property such as land and the structures on the land. Intangible Property is wealth that is held as paper or financial assets. Personal Property is wealth that is held in the form of cars, furniture, clothing, jewelry, etc.
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3 Measuring Wealth Market value can be used to establish the value of most real property and intangible property, but personal property has no acceptable resale market. Serious inequities can arise from mismeasurement of wealth and serious shifting can take place when one form of wealth is taxed while another is not.
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4 Assessment of Property Value For the property tax, the assessed value of a home and the land upon which it sits is quite subjective. Real-estate markets exists for many homes but not others.
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5 A Comprehensive Wealth Tax Where R i = the return to asset I r = the interest rate t W = the wealth tax rate W = Wealth A comprehensive wealth tax would tax all forms of capital equally. If W = Σ R i /(1 + r ) i then the effective tax rate on savings would be t s = t W W / R i
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6 Figure 17.1 Impact of a General Wealth Tax When the Supply of Savings is Perfectly Inelastic Annual Savings and Investments Return (Percent) 0 Q 1 D = r G S r G * R 1 t W W r N = r G R i t W W r N *
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This note was uploaded on 10/28/2011 for the course ECON 332 taught by Professor D.hyman during the Spring '11 term at American University of Beirut.

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Ch17 - Chapter 17 Taxes on Wealth Property and Estates 1 A Comprehensive Wealth Tax Base Real Property is property such as land and the structures

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