Odran Bonnet, Guillaume Chapelle, Alain Trannoy, Étienne Wasmer, 16 March 2021

Housing wealth is now between two and four times as large as GDP in many Western economies. This column reintroduces land and housing structures to the theory of optimal taxation, and finds that first-best taxation is achieved through a property tax on land and requires no tax on capital. Even absent land taxes, one can tax land indirectly and reach a Ramsey second best still with no tax on capital and positive housing rent taxes in the steady state. 

Charles Goodhart, Michael Hudson, 11 June 2018

The increasing income and wealth inequalities within countries is one of today’s great social concerns. This column describes how the tendency towards increasing indebtedness in much earlier societies was held in check by debt-cancellation Jubilees, and discusses ways to deal with today’s debt overhang and accompanying wealth inequalities. The funding of a modern Jubilee could come mostly, perhaps entirely, from a land/or property tax.

Paolo Surico, Riccardo Trezzi, 22 August 2015

Not much is known about the impact of housing tax hikes on consumer spending for different groups of society. This column shows that in Italy, households with mortgage debt responded to a property tax increase with a decrease in their expenditures, mostly of net vehicles purchases. The short-run direct cost (in the form of forgone consumer spending) of the tax change was small relative to the amount of extra taxes raised, but the overall negative consequences for the car industry were significant.


CEPR Policy Research