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  • To Fight Inequality, Tax Land

    Transféré par

    Peter Orszag
    12 vues3 pages
    In the lasting debate over Thomas Piketty’s book on outsized returns on capital, a significant fact has been obscured: If you exclude land and housing, capital has not risen as a share of the U.S. economy.

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    In the lasting debate over Thomas Piketty’s book on outsized returns on capital, a significant fact has been obscured: If you exclude land and housing, capital has not risen as a share of the U.S. economy.

    Droits d'auteur :

    © All Rights Reserved
    Téléchargez comme PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    12 vues3 pages

    To Fight Inequality, Tax Land

    Transféré par

    Peter Orszag
    In the lasting debate over Thomas Piketty’s book on outsized returns on capital, a significant fact has been obscured: If you exclude land and housing, capital has not risen as a share of the U.S. economy.

    Droits d'auteur :

    © All Rights Reserved
    Téléchargez comme PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    sur 3

    6/10/2015

    To Fight Inequality, Tax Land - Bloomberg View

    E C ON OMIC S

    ToFightInequality,TaxLand

    MAR3,20159:00AMEST

    ByPeterR.Orszag

    aA

    InthelastingdebateoverThomasPikettysbookonoutsizedreturnsoncapital,asignificantfact
    hasbeenobscured:Ifyouexcludelandandhousing,capitalhasnotrisenasashareoftheU.S.
    economy.
    Ifyou'resurprised,you'renottheonlyone.Intuitionsuggeststhiscapitaloutputratioshouldbe
    highertodaythanitwasintheearly1900s.Yet,intheU.S.,capitalexcludinglandandhousinghas
    beenroughlyconstantasashareoftheeconomysincethemid1950s,andislowertodaythanat
    theturnofthe20thcentury.
    Whathasskyrocketedoverthepastseveraldecadesisthevalueoflandandhousing.IntheNew
    Yorkmetropolitanareaanextremeexample,tobesuretheaveragepricepersquarefootof
    landroseto$366in2006,from$47in1999.Risinglandpricesaren'tlimitedtoNewYork,and
    theyremainlargeevenaftertheeffectsoftheGreatRecession.
    From1970to2010,U.S.housingcapitalasashareoftheeconomyrosebymorethan40
    percentagepoints,andbymuchmorethanthatinotheradvancedeconomies,asMatthewRognlie
    oftheMassachusettsInstituteofTechnologyhasfound.Thatincrease,furthermore,explains
    almostalltheriseinmeasuredcapitalasashareoftheeconomy.Therehasbeenalargelong
    termincreaseintheshareofnetincomefromhousingforeverycountryinthesampleexcept
    Germany,"Rognlieexplains."Meanwhile,thenonhousingcapitalshareshowsnocleartrend.
    Perhapsitshouldntmatterthatlandandhousingplaysuchacrucialroleintheoverallcapital
    trend.Theimplicationsforincreasinginequalityremainthesame,afterall.Yetforour
    understandingoftheeconomicprocessesatworkandforfashioningappropriatepolicy
    http://www.bloombergview.com/articles/2015-03-03/to-fight-inequality-tax-land

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    To Fight Inequality, Tax Land - Bloomberg View

    responsestoinequalityitdoesmakeadifference.
    JosephStiglitz,theNobelwinningeconomistatColumbiaUniversity,recentlypresentedapaper
    arguingthatPikettyhasmisdiagnosedtheproblemofwealthandincomeinequality,includingby
    ignoringthecrucialroleoflandandhousing.Andasaresult,Piketty'spolicyproposalsmaydo
    moreharmthangood.
    Stiglitzthusurgesthatpolicymakersdistinguishbetweenwealth,whichincludesland,and
    productivecapital,whichdoesn't.Thedistinctionisimportantbecauseanincreaseinthevalueof
    landandhousingunlikeanincreaseinotherformsofcapital,suchascomputersandequipment
    doesn'tnecessarilyincreaseourcapacitytoproducegoodsandservices.Itdoesn'timplythatwe
    haveanymorelandtouse.
    Stiglitzalsoarguesforimposingalandvaluetax,todirectlyaddressthissourceofincreasing
    wealthinequality.Economistshavelongfavoredsuchatax,becauseitdoeslittleornothingto
    distortincentives:Sincelandisroughlyfixedinsupply,there'slittleonecandotoescapealand
    tax.Indeed,fromtheperspectiveofeconomicefficiency,alandvaluetaxscoreshigherthaneven
    avalueaddedtax,whichistypicallyseenasthemostefficientformoftaxation.
    Furthermore,morethan30countrieshavealreadyimplementedsomeformoflandvaluetax.And
    theU.S.hassomelimitedexperienceofitsown,datingto1913,whenPittsburghandScranton,
    Pennsylvania,imposedahighertaxonlandvaluethanonbuildings.
    Sohereisaboldideaforanationalcandidate:Proposeanationallandvaluetax.Itwouldhighlight
    thefactthat,exceptforlandandhousing,capitalratioshavenotrisenhere,despitePiketty's
    rhetoric.Itwouldalsobeeconomicallyefficientandreducewealthinequality.Therevenuecould
    beusedtoreduceothertaxes,ortohelpclosetheactuarialdeficitsinourentitlementprograms,or
    somecombinationthereof.
    Sometimesoldideasaregoodideas.HenryGeorgeadvocatedforcefullyforalandtaxinhis1879
    book,"ProgressandPoverty."Morethan135yearslater,perhapsitstimeisripe.
    Tocontacttheauthoronthisstory:
    PeterOrszagatporszag3@bloomberg.net
    Tocontacttheeditoronthisstory:
    MaryDuenwaldatmduenwald@bloomberg.net

    http://www.bloombergview.com/articles/2015-03-03/to-fight-inequality-tax-land

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    http://www.bloombergview.com/articles/2015-03-03/to-fight-inequality-tax-land

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