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Regional impact of commuter wage taxes

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Abstract

This paper presents a model of interurban and intraurban location that is used to consider the impact of wage taxes on housing and labor markets in a metropolitan area. The focus of the paper is to examine the differences in the regional impact of commuter wage taxes (source-based wage taxes) and residents-only wage taxes (residence-based wage taxes). The model illustrates that suburban land rent and wages can be affected in equilibrium by central city policies and that the mix of public goods (that is, whether they benefit households or firms) as well as those who bear the burden of financing them has implications regarding land values and shifts in relative population and production. Understanding such linkages is important in the creation and analysis of regional economic policy.

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Authors and Affiliations

  1. Duquesne University, U.S.A.

    Paul L. Hettler

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  1. Paul L. Hettler
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Hettler, P.L. Regional impact of commuter wage taxes. Atlantic Economic Journal 32, 191–200 (2004). https://doi.org/10.1007/BF02299437

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