There is absolutely no capacity for stability under this system, no matter how high rent you pay. This destroys a great deal of value in the economy with only marginal improvements in taxation as a benefit. I do think that a society could perhaps survive under such a system, but not thrive.
It seems like it would be rife with opportunities for government corruption, since only government property would be immune to Harberger disruption.
Nobody is going to build a skyscraper. Builders of such structures can’t offer viable leases or property sales when everyone can be ousted with zero notice by a third party paying willing to pay $1 more for a single “assessment period”, and nobody is going to invest in such a venture when the risk of losing the entire future income stream is determined by something as fickle as that. There are far too many incentives for property destruction here, even if you somehow manage to avoid the thinly disguised extortion possibilities.
I think you can just drop the ‘zero notice’ part, add something like a 90 day delay between sale and transfer, and things would be a lot more workable.
There’s another problem that your comment makes me think of—in a lot of cases, the easiest and most profitable thing to do will be to just buy the property and offer to lease it back to the previous owner at a higher rate than they were last paying in Harberger tax. With capital accumulation, you’ll probably end up with giant extractive leasing company monopolies practically owning unwilling renters with no outside options—not sure what to do about this.
To be honest I mostly agree (although you would only lose your skyscraper if somebody was willing to pay 1 dollars more than you are willing to pay, not 1 dollar more than you currently are paying).
I think this setup has some really interesting theoretical properties, and I think is a good start in working out a better taxation system. The ideal system would look very similar to this but somehow preserve stability. I would like to try and dig further to find that system.
Perhaps it could be vaguely workable if the “assessment period” was something like 20 years or more. It might be possible for a major property development to make a return on investment within 20 years, but not a lot shorter in most cases.
The long-term underlying lease doesn’t need to be a major limit. Private sub-lease contracts can cover shorter terms.
One further question is whether there should be any mechanism for voluntary relinquishment. There are serious problems to avoid in both directions.
There is absolutely no capacity for stability under this system, no matter how high rent you pay. This destroys a great deal of value in the economy with only marginal improvements in taxation as a benefit. I do think that a society could perhaps survive under such a system, but not thrive.
It seems like it would be rife with opportunities for government corruption, since only government property would be immune to Harberger disruption.
Nobody is going to build a skyscraper. Builders of such structures can’t offer viable leases or property sales when everyone can be ousted with zero notice by a third party paying willing to pay $1 more for a single “assessment period”, and nobody is going to invest in such a venture when the risk of losing the entire future income stream is determined by something as fickle as that. There are far too many incentives for property destruction here, even if you somehow manage to avoid the thinly disguised extortion possibilities.
I think you can just drop the ‘zero notice’ part, add something like a 90 day delay between sale and transfer, and things would be a lot more workable.
There’s another problem that your comment makes me think of—in a lot of cases, the easiest and most profitable thing to do will be to just buy the property and offer to lease it back to the previous owner at a higher rate than they were last paying in Harberger tax. With capital accumulation, you’ll probably end up with giant extractive leasing company monopolies practically owning unwilling renters with no outside options—not sure what to do about this.
To be honest I mostly agree (although you would only lose your skyscraper if somebody was willing to pay 1 dollars more than you are willing to pay, not 1 dollar more than you currently are paying).
I think this setup has some really interesting theoretical properties, and I think is a good start in working out a better taxation system. The ideal system would look very similar to this but somehow preserve stability. I would like to try and dig further to find that system.
Perhaps it could be vaguely workable if the “assessment period” was something like 20 years or more. It might be possible for a major property development to make a return on investment within 20 years, but not a lot shorter in most cases.
The long-term underlying lease doesn’t need to be a major limit. Private sub-lease contracts can cover shorter terms.
One further question is whether there should be any mechanism for voluntary relinquishment. There are serious problems to avoid in both directions.