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 to structure and land development costs. Californias high ratio of income to property tax revenue and the distribution of Federal housing subsidies thus appear geographically misplaced. Proportional taxation of non-housing commodities is not optimal, even when elasticities with respect to wages are identical. Absent externalities, the desirability of transportation taxes andanti-sprawl growth controls hinge on the relative importance 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)
New Economics Papers: this item is included in nep-acc, nep-geo, nep-pbe, nep-pub and nep-ure
Date: 2005-07-19
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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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Persistent link: http://EconPapers.repec.org/RePEc:umc:wpaper:0505

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