Harberger Property Tax
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A Harberger Property Tax is a property tax that incentivizes property owners to accurately self-assess the value of their assets and pay taxes on that valuation, while simultaneously allowing others to purchase the property at the self-assessed price.
- Context:
- It can be designed to encourage efficient property usage and prevent speculative holding by aligning ownership with true economic value.
- It can lead to efficient allocation of property resources by discouraging speculative holding and underutilization.
- It can promote a unique form of market liquidity as properties must be available for purchase at their self-assessed values.
- It can range from being applied to real estate properties to being applicable in intellectual property contexts.
- It can foster a transparent and fair property market, as the self-assessment mechanism discourages owners from underestimating the value of their property due to the risk of forced sale.
- It can generate consistent public revenue, which can be used to fund community services or infrastructure projects.
- ...
- Example(s):
- A commercial building in a city center that is taxed based on an owner-assessed value, which must be reasonably set to avoid potential compulsory purchase at an undervalued price.
- An intellectual property right that is held under a Harberger Tax regime to ensure it is utilized efficiently or sold to someone who will make better use of it.
- ...
- Counter-Example(s):
- Progressive Tax systems, where tax rates increase with the income or wealth level of the taxpayer, unlike the flat percentage rate on the self-declared value in Harberger Tax.
- Traditional Property Tax systems, where the government assesses property values and owners have no obligation to offer their properties for sale at the assessed value.
- ...
- See: Eric Posner, Arnold Harberger, Glen Weyl.
References
2024
- (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/Harberger_Tax Retrieved:2024-4-15.
- The Harberger Tax, also known as "Common Ownership Self-assessed Tax (COST)", is a type of property tax that aims to improve societal welfare by optimising for both investment and allocative efficiency of private property. It proposes a new kind of “partial ownership”, halfway between private ownership and common ownership. The tax is implemented by two mechanisms; * Owners periodically self-assess their property and pay tax on its value. * Others are able to purchase the property from the owner at the taxed price at any time, forcing a sale. First proposed by American economist Arnold Harberger, it was further popularised in Glen Weyl and Eric Posner’s book Radical Markets: Uprooting Capitalism and Democracy for a Just Society.