OPTIMAL PROPERTY TAXATION IN CALIFORNIA: Is Greater Reliance on Land Values Feasible and Desirable?

Legal changes to Proposition 13 and fiscal imbalance provide, for the first time since 1978, the environment for serious consideration of restructuring property taxation in California. The background of the current situation is reviewed, and as a first approach to determining the optimal property tax system, Henry George's a priori case for taxing land is noted. Studies in the new public finance, especially optimal taxation theory and applications ‐ for example, general equilibrium modeling in policy analysis ‐ provide encouraging though limited support for greater reliance on site value taxation.