Winners and Losers from Property Taxation

Name: Winners and Losers from Property Taxation
Published: 2025-03-18
License: This work is licensed under an Other license created by the PSID, namely that you agree not to redistribute data or other materials without the written agreement of ICPSR, unless: 1. You serve as the OFFICIAL or DESIGNATED REPRESENTATIVE at an ICPSR MEMBER INSTITUTION and are assisting AUTHORIZED USERS with obtaining data, or 2. You are collaborating with other AUTHORIZED USERS to analyze the data for research or instructional purposes.

Principal Investigator(s): View help for Principal Investigator(s) Kasper Kragh Balke, University of Oslo; Markus Karlman, NHH Norwegian School of Economics; Karin Kinnerud, BI Norwegian Business School

Version: View help for Version V1

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CPI.do	text/plain	1.5 KB	08/20/2020 04:17:AM
J221589.do	text/plain	32 KB	03/14/2025 07:03:AM
J221589.pdf	application/pdf	513.6 KB	01/19/2017 12:03:AM
J221589.txt	text/plain	13.8 MB	01/19/2017 12:02:AM
J221589_label_define.do	text/plain	112 KB	01/19/2017 12:02:AM
Master.do	text/plain	3.7 KB	03/14/2025 07:03:AM
Sub1_PSID.do	text/plain	11.2 KB	03/17/2025 10:24:AM
Sub2_PSID.do	text/plain	7.6 KB	03/18/2025 07:04:AM
Sub3_PSID.do	text/plain	4.1 KB	03/17/2025 09:40:AM

Project Citation:

Balke, Kasper Kragh, Karlman, Markus, and Kinnerud, Karin. Winners and Losers from Property Taxation. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-03-18. https://doi.org/10.3886/E223402V1

Project Description

Summary:

This paper considers optimal taxation of housing capital. To this end, we employ a life-cycle model calibrated to the U.S. economy, where asset holdings and labor productivity vary across households, and tax reforms lead to changes in house and rental prices, interest rates, and wages. We find that the optimal property tax in the long run is considerably higher than today, partly due to the relatively inelastic demand and supply of housing. A higher property tax also reduces house prices and causes a reallocation from housing to business capital, which in turn decreases interest rates and increases wages. These equilibrium effects allow for an improved consumption smoothing over the life cycle. However, most current households would incur substantial welfare losses from an implementation of a higher property tax, since house prices fall, and a majority own their home.Hence, when accounting for transitional dynamics, it is not clear that a higher property tax is feasible or preferred.

Scope of Project

Subject Terms: PSID

Time Period(s): 1970 – 1992

Collection Date(s): 1/19/2017 – 1/19/2017

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V1 [2025-03-18]

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