Land, Wealth, and Taxation

Roberto Brunetti, Carl Gaigne and Fabien Moizeau

No 348477, Working Papers from Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2)

Abstract: We examine the role of land in wealth dynamics, and its consequences on efficiency and inequality by focusing on the interplay among agents’ bidding for location, mortgage market imperfections, and inheritance. We develop a model in which altruistic agents leave to their heirs a financial bequest and their housing wealth. The borrowing constraint generates a housing return premium and spatial wealth sorting, which translate into persistent inequality. Since altruism and the borrowing constraint distort land price formation, we discuss different corrective tax schedules. Land taxation cannot be disconnected from inheritance taxation, and must be levied on the inheriting generation.

Keywords: Community/Rural/Urban Development; Consumer/Household Economics; Land Economics/Use; Public Economics (search for similar items in EconPapers)
Pages: 60 p.
Date: 2024-12-13
New Economics Papers: this item is included in nep-fdg, nep-pbe, nep-pub and nep-ure
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https://ageconsearch.umn.edu/record/348477/files/WP24-08.pdf (application/pdf)

Related works:
Working Paper: Land, Wealth, and Taxation (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:inrasl:348477

DOI: 10.22004/ag.econ.348477

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