This paper aims to bridge the gap between the conceptual appeal and the practical irrelevance of rent taxation. Nevertheless, rent taxation is a marginal topic, both in research and policy making. For this reason, it is much better suited for redistribution than are capital taxes. Rent taxation does not distort the supply of the tax base. The high concentration of rents and the disproportionate increase in rents identified in the recent literature suggest that rent taxation could be an ideal tool of redistribution. He continues to note that models that equate wealth and capital are therefore insufficient to understand increasing inequality. Stiglitz ( 2015) refines this analysis by pointing out that a major driver of the concentration in wealth is an acceleration in rent income. Recently, authors, such as Piketty ( 2014), have pointed out that a strong concentration of wealth is a major source of inequality, which cannot be addressed by progressive income taxation. Progressive income taxation as discussed in Mirrlees ( 1971) has received a great amount of attention by economists as a response to inequality and as an approach to redistribution. The interaction of many of these effects remains unexplored, which might explain policymakers' hesitation in using land taxes to date. We then begin to develop a comprehensive theory of land rent taxation by identifying relevant efficiency and equity effects. Land rents have significant potential to improve the efficiency of the tax system. What remains for taxation are land rents, one of the few true scarcity rents. In a systematic review of the neoclassical literature on different rent types, we find that some types of rents reflect inefficiencies and should thus be minimized, while others reward investments and should be supported in line with social welfare. Nevertheless, rent taxation remains a marginal topic in research and policy making. Rent taxation thus seems attractive for reasons of both efficiency and equity. In addition, the recent literature documents that rent income is highly concentrated and that rents are quickly increasing. Economic rents have long been identified as an efficient tax base.
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