Department of Economics
University of Delaware
Working Paper #2003-14
Land value taxes and wilmington, Delaware: a case study
Eleanor D. Craig
Ten years ago, the City of Wilmington, DE was poised to adopt a two tier tax structure, with all the the property tax burden focused on land and the tax on building gradually falling to zero. This concept has been used successfully throughout the world, and enormous efficiency gains were projected for Wilmington. Today another form of land value taxation has been implemented, whereby vacant housing is fined, with the fine escalating as the duration of the vacancy increases. The paper argues that this tax structure will also achieve a better allocation of housing resources, making it expensive to own property that does not earn income.
JEL Classification Numbers: H71
Keywords: Land Value Taxation