EBCOR

Excess Burden Comes Out of Rent (EBCOR) is a concept of deadweight loss, unique in theory with the heterodox Georgist school of political economy. The name and acronym for EBCOR were first introduced by Mason Gaffney in 2009, who summarized the concept as being, "[The] gains to rent from removing excess burdens [of taxation]." Excess burdens from taxation on the production and consumption of wealth cause a reduction in expected rental yields, compared to if there were no such taxes in place. EBCOR, on its own, does not involve the assumption that these economic rents would be taxed themselves. Instead, EBCOR implies that such sources of rent (i.e., land value) can be taxed at a rate that does not discourage investments into the production or consumption of wealth. EBCOR is a complementary function to All Taxes Come Out of Rent (ATCOR)—also developed by Gaffney, and the Henry George theorem (HGT) popularized by Joseph Stiglitz.

Excess Burden Comes Out of Rent (EBCOR) is a concept of deadweight loss, unique in theory with the heterodox Georgist school of political economy. The name and acronym for EBCOR were first introduced by Mason Gaffney in 2009, who summarized the concept as being, "[The] gains to rent from removing excess burdens [of taxation]." Excess burdens from taxation on the production and consumption of wealth cause a reduction in expected rental yields, compared to if there were no such taxes in place. EBCOR, on its own, does not involve the assumption that these economic rents would be taxed themselves. Instead, EBCOR implies that such sources of rent (i.e., land value) can be taxed at a rate that does not discourage investments into the production or consumption of wealth. EBCOR is a complementary function to All Taxes Come Out of Rent (ATCOR)—also developed by Gaffney, and the Henry George theorem (HGT) popularized by Joseph Stiglitz. NAT=N-tG=N(1-tG/N) Where: NAT is net revenue after tax; N is net revenue; t is tax; G is gross revenue. Gaffney then showcases a table illustrating the effect that taxes on the production and consumption of wealth, have on gross revenue, and therefore net revenue: Simply put, a tax on gross revenue causes the landholder to favor lower productive land uses over their land's highest and best use, and therefore incurring excess burdens onto economic productivity.

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