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Download the Paper (312 K, PDF file) - July 12, 2005 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
We show that the optimal property tax rate rises with the ratio of land rents to structure and land development costs. California’s 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 and “anti-sprawl” growth controls hinge on the relative importance of time versus money in commuting costs.

SUGGESTED CITATION:
Saku P. Aura and Thomas Davidoff, "Optimal Commodity Taxation When Land and Structures Must Be Taxed at the Same Rate" (July 12, 2005). Fisher Center for Real Estate & Urban Economics. Fisher Center Working Papers: Paper 295.
http://repositories.cdlib.org/iber/fcreue/fcwp/295