Full Citation

Title: Are Houses Too Big or In the Wrong Place? Tax Benefits to Housing and Inefficiencies in Location and Consumption

Citation Type: Journal Article

Publication Year: 2014

ISBN:

ISSN:

DOI: 10.1086/675588

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Abstract: Executive SummaryTax benefits to owner-occupied housing provide incentives to consume housing, offsetting weaker disincentives of the property tax. These benefits also help counter the penalty federal taxes impose on households who work in productive high-wage areas, but reinforce incentives to consume local amenities. We simulate the effects of these benefits in a parameterized model, and determine the consequences of various tax reforms. Reductions in housing tax benefits generally increase efficiency in consumption, but reduce efficiency in location decisions, unless they are accompanied by tax rate reductions. The most efficient policy would eliminate most tax benefits to housing and index taxes to local wage levels.

Url: https://www.journals.uchicago.edu/doi/10.1086/675588

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Authors: Albouy, David; Hanson, Andrew

Periodical (Full): Tax Policy and the Economy

Issue: 1

Volume: 28

Pages: 63-96

Data Collections: IPUMS USA

Topics: Housing and Segregation, Other

Countries: