Six years ago I posted on the idea of using combinatorial auctions as a substitute for zoning. Since then, news on how badly zoning has been messing up our economy has only gotten worse. I included the zoning combo auction idea in my book
On reflection, I think the distributional effects of this proposal are still underrated in this discussion. You wave some of them away elsewhere by saying "well, on average everyone else will face the same threats as you" but there is considerable variation in how change-averse and how "rooted" in particular local arrangements people are. Taxing them this way is going to have a strong first-order redistributive effect from the more change-averse/rooted to the less change-averse/rooted. This is probably, in aggregate, a redistribution from an already-less-well-off majority to an already-better-off minority.
You might counterargue that:-- some second order redistributive effect will go the other way-- efficiency increases will swamp the redistributive effect and make everyone better off long term-- justice demands this redistribution because currently the change-averse/rooted majority is unfairly burdening the less change-averse/rooted minority by indulging their preference for stability without paying for it
But none of these are likely to prevail against the easy stories to tell, which are all going to be about people who already have a lot of advantages in the modern world being able to use those advantages to disrupt the lives of less-advantaged people in a way that looks very predatory. Again, this could be considerably mitigated by exempting primary residences.
I really think you are greatly exaggerating any difficulties here. Your property values don't change that fast, and there'd be agents & apps happy to help.
I'm confident that agents and apps would be available to help you adjust your declared property value in reasonable ways. It's only if you didn't trust those sources that you'd have to think more.
Are we confident that this is reducing the information burden, rather than simply shifting it? From here:
"Yes, this system adds some complexity to property law, but it can also greatly simplify many areas of law, including property tax assessment, eminent domain, necessity exceptions to contract, accident liability levels, corporate buyouts, and patent and copyright licensing"
I notice that these are all problems that overwhelmingly affect larger entities like businesses and governments, all of whom maintain or have easy access to competent professional expertise in these areas.
Compare the information load of the homeowner under the old and new systems. Previously they had to learn about market values; engage professional services in the form of real estate agents, attorneys and inspectors; arrange to actually vacate the premises in a timely manner. However, they only had to do this when they went shopping for a house, or when they were selling their house, which is a period of years between. Under the new system, these obligations are effectively continuous. Even if the domains are each simpler than they were before, having to stay on top of them constantly is a huge increase in the burden, and doesn't change the requirement for outside expertise.
Is there any sense of the limits on the amount of information we could expect the average property owner to be able to handle?
That's a good point, but I think that has more to do with people consistently underestimating certain types of risk. By the same logic, people won't spend $15 on a smoke detector at home, because they don't really believe their house will burn down, but will gladly spend a million dollars on a surgery that might have a chance of saving them from cancer.
Which may be another problem with this kind of scheme; people will likely systematically under-price the risk of, say, someone buying their home out from under them, not pay enough on an ongoing basis to prevent that, and then be shocked and horrified when someone does it.
I just want to own property not play little libertarian thought experiment games.
It's notable that this proposal seems popular with libertarians, since it doesn't seem to be very libertarian at all. [What gives the state the right to order me to reveal, on pain of partial confiscation, my private valuations?]
It's currently legal to report to the police that Bob committed a crime. But it's illegal to tell Bob you'll report him to the police unless he pays you keep-quiet money. The latter is extortion.
Why do you think this system would need to allow threats of "pay me or else?"
Is it less materialistic to be attached to things rather than to money? I think you misunderstand the term, which opposes obtaining wealth in general to pursuing the spiritual or intellectual. Anti-materialists will not, as a rule, be pleased with having to attach a monetary value to every possession. This practice is of the essence of a materialistic ethos.
Still, it seems that allocative inefficiency is a major market failure. I'm not sure that sentimentalism about possessions is a super-important value.
Would it be possible for a friend and I sell our primary residence back and forth, queuing up thousands of years worth of allowed transfer time with effectively no tax?
My first priority is to figure out what changes seem best, and only secondly to try to sell them.
Yeah, that's true. Thanks.
On reflection, I think the distributional effects of this proposal are still underrated in this discussion. You wave some of them away elsewhere by saying "well, on average everyone else will face the same threats as you" but there is considerable variation in how change-averse and how "rooted" in particular local arrangements people are. Taxing them this way is going to have a strong first-order redistributive effect from the more change-averse/rooted to the less change-averse/rooted. This is probably, in aggregate, a redistribution from an already-less-well-off majority to an already-better-off minority.
You might counterargue that:-- some second order redistributive effect will go the other way-- efficiency increases will swamp the redistributive effect and make everyone better off long term-- justice demands this redistribution because currently the change-averse/rooted majority is unfairly burdening the less change-averse/rooted minority by indulging their preference for stability without paying for it
But none of these are likely to prevail against the easy stories to tell, which are all going to be about people who already have a lot of advantages in the modern world being able to use those advantages to disrupt the lives of less-advantaged people in a way that looks very predatory. Again, this could be considerably mitigated by exempting primary residences.
1. You are missing that others instantly buy the property and force the insurer to pay a much larger amount for it at their higher declared value.
I really think you are greatly exaggerating any difficulties here. Your property values don't change that fast, and there'd be agents & apps happy to help.
No one said that the tax doesn't apply during a transfer period.
I'm confident that agents and apps would be available to help you adjust your declared property value in reasonable ways. It's only if you didn't trust those sources that you'd have to think more.
So I should register every pencil, every paperclip? Or I don't own it??
So I should register every pencil, every paperclip? Or I don't own it?
If it's unregistered with the cadaster, it's unowned.
Are we confident that this is reducing the information burden, rather than simply shifting it? From here:
"Yes, this system adds some complexity to property law, but it can also greatly simplify many areas of law, including property tax assessment, eminent domain, necessity exceptions to contract, accident liability levels, corporate buyouts, and patent and copyright licensing"
I notice that these are all problems that overwhelmingly affect larger entities like businesses and governments, all of whom maintain or have easy access to competent professional expertise in these areas.
Compare the information load of the homeowner under the old and new systems. Previously they had to learn about market values; engage professional services in the form of real estate agents, attorneys and inspectors; arrange to actually vacate the premises in a timely manner. However, they only had to do this when they went shopping for a house, or when they were selling their house, which is a period of years between. Under the new system, these obligations are effectively continuous. Even if the domains are each simpler than they were before, having to stay on top of them constantly is a huge increase in the burden, and doesn't change the requirement for outside expertise.
Is there any sense of the limits on the amount of information we could expect the average property owner to be able to handle?
That's a good point, but I think that has more to do with people consistently underestimating certain types of risk. By the same logic, people won't spend $15 on a smoke detector at home, because they don't really believe their house will burn down, but will gladly spend a million dollars on a surgery that might have a chance of saving them from cancer.
Which may be another problem with this kind of scheme; people will likely systematically under-price the risk of, say, someone buying their home out from under them, not pay enough on an ongoing basis to prevent that, and then be shocked and horrified when someone does it.
I just want to own property not play little libertarian thought experiment games.
It's notable that this proposal seems popular with libertarians, since it doesn't seem to be very libertarian at all. [What gives the state the right to order me to reveal, on pain of partial confiscation, my private valuations?]
I don't follow.
It's currently legal to report to the police that Bob committed a crime. But it's illegal to tell Bob you'll report him to the police unless he pays you keep-quiet money. The latter is extortion.
Why do you think this system would need to allow threats of "pay me or else?"
Is it less materialistic to be attached to things rather than to money? I think you misunderstand the term, which opposes obtaining wealth in general to pursuing the spiritual or intellectual. Anti-materialists will not, as a rule, be pleased with having to attach a monetary value to every possession. This practice is of the essence of a materialistic ethos.
Still, it seems that allocative inefficiency is a major market failure. I'm not sure that sentimentalism about possessions is a super-important value.
Then don't play.
I'm sure that some other people will step into the role of making money at the expense of hot-heads with deep pockets.
Would it be possible for a friend and I sell our primary residence back and forth, queuing up thousands of years worth of allowed transfer time with effectively no tax?