Abstract: The existing system of private property interferes with allocative efficiency by giving owners the power to hold out for excessive prices. We propose a remedy in the form of a tax on property, based on the value self-assessed by its owner at intervals, along with a requirement that the owner sell the property to any third party willing to pay a price equal to the self-assessed value. The tax rate would reflect a tradeoff between gains from allocative efficiency and losses to investment efficiency, likely in the range of 5 to 10 percent annually for most assets. We discuss the detailed design of this system from an economic and legal perspective.
@article{10.1093/jla/lax001,
author = {Posner, Eric A. and Weyl, E. Glen},
title = "{Property Is Only Another Name for Monopoly}",
journal = {Journal of Legal Analysis},
volume = {9},
number = {1},
pages = {51-123},
year = {2017},
month = {04},
abstract = "{The existing system of private property interferes with allocative efficiency by giving owners the power to hold out for excessive prices. We propose a remedy in the form of a tax on property, based on the value self-assessed by its owner at intervals, along with a requirement that the owner sell the property to any third party willing to pay a price equal to the self-assessed value. The tax rate would reflect a tradeoff between gains from allocative efficiency and losses to investment efficiency, likely in the range of 5 to 10 percent annually for most assets. We discuss the detailed design of this system from an economic and legal perspective.}",
issn = {2161-7201},
doi = {10.1093/jla/lax001},
url = {https://doi.org/10.1093/jla/lax001},
eprint = {https://academic.oup.com/jla/article-pdf/9/1/51/17648497/lax001.pdf},
}