Property Is Another Name for Monopoly

By Eric Posner

Posted on August 16, 2016


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That’s the title—or the beginning of an uncharacteristically long title—of a paper that Glen Weyl and I have posted on SSRN. Here’s the idea:

 

Every year you send to a registry the amount that you value your house. The property tax you pay is a percentage of the valuation. But you’ll resist the impulse to value your house at 1 cent because if you do, someone will come along and buy your house from under you. That’s because of the other element of the scheme: anyone can force a sale of your house at your self-assessed valuation. The tax is keyed so that you will honestly reveal your valuation, to the extent compatible with maintaining incentives to invest in improving the house.

 

One person I described this idea to reacted very negatively, at one point calling it “socialism” and at another point calling it “the market gone wild.” Or maybe it’s both? Or neither? You’ll have to read the paper to find out.

 

 

The preceding is republished on TAP with permission by its author, Eric Posner, Professor of Law, University of Chicago. “Property Is Another Name for Monopoly” was originally published August 4, 2016 on Professor Posner's professional blog.

 


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