Optimal Commodity Taxation When Land and Structures Must Be Taxed at the Same Rate

Saku Aura and Thomas Davidoff ()

No 505, Working Papers from Department of Economics, University of Missouri

Abstract: We show that the optimal property tax rate rises with the ratio of land rents tostructure and land development costs. Californias high ratio of income to property taxrevenue and the distribution of Federal housing subsidies thus appear geographicallymisplaced. Proportional taxation of non-housing commodities is not optimal, evenwhen elasticities with respect to wages are identical. Absent externalities, the desirabilityof transportation taxes and anti-sprawl growth controls hinge on the relativeimportance of time versus money in commuting costs.

Keywords: Property Taxes; Henry George Theorem (search for similar items in EconPapers)
JEL-codes: H21 R13 (search for similar items in EconPapers)
Pages: 32 pgs.
Date: 2005-07-19
New Economics Papers: this item is included in nep-acc, nep-geo, nep-pbe, nep-pub and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Optimal Commodity Taxation when Land and Structures must be Taxed at the Same Rate (2005)
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