Land is a major generator of gains from trade because it is fixed in quantity and arises naturally, resulting in low costs for sellers and high demand from buyers. The fixed quantity also allows policymakers to tailor prices or taxes to inframarginal units. But the current mode of redistributing the surpluses generated by land sales in America – the local property tax – has important drawbacks. These include the need for property value assessments, the fact that some homeowners lack the cash income required to pay the tax even when the assessment is accurate, and the fact that local administration means there is little redistribution from rich communities to poor ones. Taxing imputed rents as income at the federal level would address these problems. Imputed rent is the rent that a homeowner pays to himself for the right to live in the house. It is economically equivalent to a home’s value because home values are determined by the rents they command. Taxing them as federal income does not require home value assessments (local rental data suffice), ensures that tax rates vary with income, and leverages the mildly progressive federal income tax rate structure to redistribute wealth.