@article{96ed265b3b944df193830550b868a561,
title = "Land is back, it should be taxed, it can be taxed",
abstract = "Land is back. The increase in wealth in the second half of 20th century arose from housing and land. It should be taxed. We introduce land and housing structures in Judd's standard setup: first best optimal taxation is achieved with a property tax on land and requires no tax on capital. With positive taxes on housing rents, a first best is still possible but with subsidies to rental housing investments, and either with differential land tax rates or with a tax on imputed rents. It can be taxed. Even absent land taxes, one can tax it indirectly and reach a Ramsey-second best still with no tax on capital and positive housing rent taxes in the steady-state. This result extends to the dynamics under restrictions on parameters.",
keywords = "Capital, First best, Housing, Land, Optimal tax, Second best, Wealth",
author = "Odran Bonnet and Guillaume Chapelle and Alain Trannoy and Etienne Wasmer",
note = "Funding Information: This work is a development of the May 14, 2014 discussion paper 2014-07 of the Economics Department in Sciences Po by Odran Bonnet, Pierre-Henri Bono, Guillaume Chapelle and Etienne Wasmer, itself a translation of a first note in French (LIEPP{\textquoteright}s discussion paper 25, April 2014). We would like to thank, among many others, Philippe Aghion, Bob Allen, Jess Benhabib, Alex Citanna, Gilles Duranton, Robert Gary-Bobo, Pierre-Henri Bono, Luigi Guiso, Christian Haefke, Zvi Hercowitz, Ricardo Lagos, Claudio Michelacci, Abdoulaye Ndiaye, Kevin O{\textquoteright}Rourke, Luigi Pacello, Eric Rasmusen, Pietro Reichlin, Michael Reiter, Peter Rupert, Gregor Schwerhoff, Philippe Weil, Pablo Winant and Mike Woodford for discussions, useful suggestions and comments, the editor and an associate editor, as well numerous referees, as seminar participants in numerous seminars including EIEF, Copenhagen Business School, Queen{\textquoteright}s College London, LISER, CREM in Paris Dauphine, Roy seminar in Paris, Sciences Po seminar, Leuven, Toulouse, NYUAD and Canazei. Etienne Wasmer and Guillaume Chapelle acknowledge support from ANR-11-LABX-0091 (LIEPP) and ANR-11-IDEX-0005-02. Alain Trannoy, Etienne Wasmer and Guillaume Chapelle also acknowledge support from ANR-17-CE41-0008 (ECHOPPE). Funding Information: This work is a development of the May 14, 2014 discussion paper 2014-07 of the Economics Department in Sciences Po by Odran Bonnet, Pierre-Henri Bono, Guillaume Chapelle and Etienne Wasmer, itself a translation of a first note in French (LIEPP's discussion paper 25, April 2014). We would like to thank, among many others, Philippe Aghion, Bob Allen, Jess Benhabib, Alex Citanna, Gilles Duranton, Robert Gary-Bobo, Pierre-Henri Bono, Luigi Guiso, Christian Haefke, Zvi Hercowitz, Ricardo Lagos, Claudio Michelacci, Abdoulaye Ndiaye, Kevin O'Rourke, Luigi Pacello, Eric Rasmusen, Pietro Reichlin, Michael Reiter, Peter Rupert, Gregor Schwerhoff, Philippe Weil, Pablo Winant and Mike Woodford for discussions, useful suggestions and comments, the editor and an associate editor, as well numerous referees, as seminar participants in numerous seminars including EIEF, Copenhagen Business School, Queen's College London, LISER, CREM in Paris Dauphine, Roy seminar in Paris, Sciences Po seminar, Leuven, Toulouse, NYUAD and Canazei. Etienne Wasmer and Guillaume Chapelle acknowledge support from ANR-11-LABX-0091 (LIEPP) and ANR-11-IDEX-0005-02. Alain Trannoy, Etienne Wasmer and Guillaume Chapelle also acknowledge support from ANR-17-CE41-0008 (ECHOPPE). Publisher Copyright: {\textcopyright} 2021",
year = "2021",
month = may,
doi = "10.1016/j.euroecorev.2021.103696",
language = "English (US)",
volume = "134",
journal = "European Economic Review",
issn = "0014-2921",
publisher = "Elsevier",
}