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Local goverments can choose one of different subjects to
impose tax to raise money for public goods. Several subjects
can be taxed. The study bulids models to compare household
utility levels when different subjects are taxed. In a linear
city, households make the maximal bid rents for their
residential locations. The public goods, which can be a
green belt or a thoroughfare, is a strip of land with
constant width running from the CBD to the boundary dividing
the city and the rural area. The subjects and the taxed
have the following forms: lump sum tax on househlods, ad
valorem tax or unit tax on land, ad valorem tax on fuel, or on
composite goods. When the city does not impose land use
control, the models show that under a specific set of
parameters a specific subject, corresponding with an optimal
width for the public goods, should be chosen to bear the
taxation. When the city does have land use control, both the
ad valorem tax and the unit tax on land are the optimal taxes
to bring the same maximal utility level regardless of whatever
the parameters are.
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