Title of Presentation:
Idiosyncratic Land Taxes and Their Effect on the Real Economy
Abstract:
We show that land taxes are associated with higher density, neighborhood diversity, business formation, and other indicators of economic performance. To demonstrate this, we first estimate idiosyncratic land taxes (or subsidies) for over 2,000 counties in the US. We use the fact that property taxes are based on tax-assessed values rather than market prices. County assessors that, for idiosyncratic reasons, overvalue land relative to the market impose an implicit land tax. Consistent with these land taxes being idiosyncratic, we find substantial dispersion across counties in the US and within metropolitan statistical areas. Finally, we develop a model of land taxes and endogenous population to rationalize our results.
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