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| Hehe. Well, if everyone just did their own research from scratch, we wouldn't even need these forums. I'm asking here because I thought that maybe somebody already had gone through "a few years of business school, and maybe one or two years experiencing life" so they could summarize their wisdom in a few sentences :P | |
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It's an economics question, not one for a business guy. Anyways,
a) Taxes are not lost money. What you choose with your location is a package of taxes and public goods / public services. Other things equal, people will choose the package that best fits their needs. (
http://en.wikipedia.org/wiki/Tiebout_model )
b) Taxes capitalize into housing prices - the lower the taxes, the higher housing prices. If this house price capitalization is complete, there's no incentive to move for anyone (again, other things equal).
http://www.sciencedirect.com/science...51137710000306
c) If house price capitalization is incomplete, people differ in their level of income, and the tax schedule is not flat but progressive, rich people will move to low tax places, and poor people will move to high tax places (again, other things equal).
http://kof.ethz.ch/de/publikationen/...ng-papers/240/
d) other things ain't equal. Proximity to friends, family, workplace and your favourite pub do count, as well as any other idiosynchratic feature of a city (traffic connection, nightlife, socio-demographics, healthcare and whatnot).