ABSTRACT
The Consumption Theory of Land Rent analysis is limited in the chapter to one of how the various types of taxes are to be included within the household's budget constraint. This chapter examines the three principal forms of taxation: property taxes, sales taxes, and income taxes. Ad valorem property taxes are a percentage of total market value of housing. The sales tax is a percentage of composite good expenditures that must be paid to the government. In the Common Market, the value added tax is to the consumer quite indistinguishable from the sales tax. Income taxes are made more complex by the mortgage interest deduction. Each of the different kinds of tax may affect the geography of the city in a different manner: the property tax is a tax on land; the sales tax is a tax upon composite good.
