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Land, Wealth, and Taxation

Author

Listed:
  • Roberto Brunetti

    (Univ Rennes, CNRS, CREM-UMR6211, F-35000 Rennes, France)

  • Carl Gaigné

    (INRAE, SMART, Rennes, France and Laval University, CREATE, Quebec, Canada)

  • Fabien Moizeau

    (Univ Rennes, CNRS, CREM-UMR6211, F-35000 Rennes, France)

Abstract

We examine the role of land in wealth dynamics and taxation policy 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 heir a financial bequest and their housing wealth. The borrowing constraint generates a housing return premium and spatial wealth sorting, which translate into persistent inequality. We derive an optimal tax schedule that combines a tax on the land share in the value of inherited housing assets and on lifetime wealth, allowing a more efficient allocation of resources and lower inequality.

Suggested Citation

  • Roberto Brunetti & Carl Gaigné & Fabien Moizeau, 2023. "Land, Wealth, and Taxation," Economics Working Paper Archive (University of Rennes & University of Caen) 2023-06, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:2023-06
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    References listed on IDEAS

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    More about this item

    Keywords

    Mortgage market imperfections; Spatial sorting; Wealth distribution; Wealth Taxation; Efficiency.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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