Chapter 5: Taxing Immobile Factors and Wealth

In Chapter 5, we discuss the taxation of immobile factors, which are characterized by their inability to cross borders. Taxing immobile factors avoids the erosion of the fiscal base related to international mobility. However, the incidence of such tax is not always fair, and this sets limitations on the extent to which governments are willing to use such taxes. In this chapter, we describe some of the most prominent immobile factors in the discussion surrounding fair taxation: consumption, land, wealth, and inheritance.