Split-rate tax increases development activity as measured by building permits.

"Oates and Schwab (1997) and Plassmann and Tideman (2000) show that the split-rate tax increases development activity as measured by building permits. This finding suggests the split- rate tax does have the expected effect on the land/capital ratio. Whether the aggregate increase in capital is the result of the improvement effect or of the dwelling size effect is unclear."

empirical