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> This inevitable consequence is that people would be forced to "value" their house at the maximum they think it might be worth in 12 months time or risk losing

> This inevitable consequence is that people would be forced to "value" their house at the maximum they think it might be worth in 12 months time or risk losing their home, or even higher to signal that they really don't want to leave their home, all the while paying more tax than they need to because the actual market price for houses would be lower. This is mostly a thought experiment so there is not an actual detailed implementation plan by the authors. But my sense was that it's not that you actually have to sell immediately but more like someone can offer to buy at $X and then you either have to sell or $X becomes the new declared value for future tax payments.

politician 3y ago
Extortion is a risk in this modified implementation. "Is that a $1 house? I'll buy it for $100. No? Enjoy your tax bill. If you want the bill to go away, sell it to me for $0.50." If I had to propose a mechanism, I'd suggest using prediction markets instead.
- s1artibartfast 3y ago
  Yeah, it sounds like an optimal whipping algorithm for maximizing slave labor.
- thinkharderdev 3y ago
  But for that to work you have to actually be willing to buy at $100. So you can come along and try and buy my house for 2x the market rate, but then I can just sell it to you and you're screwed. Of course in the real world there would need to be some way to prevent "predatory" offers (where the "buyer" can't or won't actually close the deal if you accept the offer) but that seems solvable to me. You may have to put down a non-refundable deposit or escrow the sale price, etc.
  - politician 3y ago
    If the solution requires the full payment to be in escrow before the seller is even aware of this particular unsolicited buyout order, it will become difficult for lenders to provide mortgages since they will have no guarantee that the seller isn't already in a negotiation with another buyer. So it might be better to establish a prediction market for any such asset that settles on the owner of the asset on, say, a quarterly basis. Instead of predicting the value of the asset, it predicts the owner of the asset at a particular price level. Instead of presenting the current owner with a bid directly, ownership transfers and tax payments would be handled exclusively through the market platform. ... That said, this is all getting pretty complex.
  - chexum 3y ago
    I think the pathological cases should be made impossible before anything like that is considered for a world with humans. Y’all underestimate the number of people with enough money to screw someone (or everyone) over just because they can. Like when someone made a phoney valuation for a web site at $44B.
    - brewdad 3y ago
      But, in that case, the owners did walk away with $44 billion.
s1artibartfast 3y ago
I think it is still fair to point out that it is a thought experiment on how to extract as much value in the form of taxes. It makes sense only if you see taxes as a positive good, ignore the concept of ownership, and are pretty loose with the human suffering implications.
- anonymoushn 3y ago
  Maybe it makes sense if you've seen the human suffering implications of prop 13
  - s1artibartfast 3y ago
    Which are what exactly? The state has been setting record surpluses. Housing is very expensive, but that's due to a failure to build. Higher property taxes doesn't reduce the cost of ownership or make housing more affordable. This is like saying we should rise the tax rate on food because people are starving in the street
    - clarifyingN 3y ago
      [flagged]
      - kadoban 3y ago
        You could consider being more humble and polite, especially if you're going to be wrong. (Note that they said _state_, your numbers are national).
    - dragonwriter 3y ago
      > Housing is very expensive, but that's due to a failure to build. The low maximum property tax rate and systematic failure to tax full value created by Prop 13 is a reason for the failure to build. (Now, actually, I think residential property tax is a horribly regressive tax, and its better to fund government by progressive income taxes, but there needs to be a funding allocation formula that gives local government more of an incentive for development; California has adopted some limits on discretion and consequences for not meeting targets as a stick, but that's not enough to encourage good positive planning.)
FireBeyond 3y ago
> But my sense was that it's not that you actually have to sell immediately but more like someone can offer to buy at $X and then you either have to sell or $X becomes the new declared value for future tax payments. That can easily be maliciously abused too, using it to drive someone's taxes up until they're forced to sell.

politician 3y ago

Extortion is a risk in this modified implementation. "Is that a $1 house? I'll buy it for $100. No? Enjoy your tax bill. If you want the bill to go away, sell it to me for $0.50." If I had to propose a mechanism, I'd suggest using prediction markets instead.

s1artibartfast 3y ago
Yeah, it sounds like an optimal whipping algorithm for maximizing slave labor.
thinkharderdev 3y ago
But for that to work you have to actually be willing to buy at $100. So you can come along and try and buy my house for 2x the market rate, but then I can just sell it to you and you're screwed. Of course in the real world there would need to be some way to prevent "predatory" offers (where the "buyer" can't or won't actually close the deal if you accept the offer) but that seems solvable to me. You may have to put down a non-refundable deposit or escrow the sale price, etc.
- politician 3y ago
  If the solution requires the full payment to be in escrow before the seller is even aware of this particular unsolicited buyout order, it will become difficult for lenders to provide mortgages since they will have no guarantee that the seller isn't already in a negotiation with another buyer. So it might be better to establish a prediction market for any such asset that settles on the owner of the asset on, say, a quarterly basis. Instead of predicting the value of the asset, it predicts the owner of the asset at a particular price level. Instead of presenting the current owner with a bid directly, ownership transfers and tax payments would be handled exclusively through the market platform. ... That said, this is all getting pretty complex.
- chexum 3y ago
  I think the pathological cases should be made impossible before anything like that is considered for a world with humans. Y’all underestimate the number of people with enough money to screw someone (or everyone) over just because they can. Like when someone made a phoney valuation for a web site at $44B.
  - brewdad 3y ago
    But, in that case, the owners did walk away with $44 billion.

s1artibartfast 3y ago

I think it is still fair to point out that it is a thought experiment on how to extract as much value in the form of taxes. It makes sense only if you see taxes as a positive good, ignore the concept of ownership, and are pretty loose with the human suffering implications.

anonymoushn 3y ago
Maybe it makes sense if you've seen the human suffering implications of prop 13
- s1artibartfast 3y ago
  Which are what exactly? The state has been setting record surpluses. Housing is very expensive, but that's due to a failure to build. Higher property taxes doesn't reduce the cost of ownership or make housing more affordable. This is like saying we should rise the tax rate on food because people are starving in the street
  - clarifyingN 3y ago
    [flagged]
    - kadoban 3y ago
      You could consider being more humble and polite, especially if you're going to be wrong. (Note that they said _state_, your numbers are national).
  - dragonwriter 3y ago
    > Housing is very expensive, but that's due to a failure to build. The low maximum property tax rate and systematic failure to tax full value created by Prop 13 is a reason for the failure to build. (Now, actually, I think residential property tax is a horribly regressive tax, and its better to fund government by progressive income taxes, but there needs to be a funding allocation formula that gives local government more of an incentive for development; California has adopted some limits on discretion and consequences for not meeting targets as a stick, but that's not enough to encourage good positive planning.)

FireBeyond 3y ago

> But my sense was that it's not that you actually have to sell immediately but more like someone can offer to buy at $X and then you either have to sell or $X becomes the new declared value for future tax payments. That can easily be maliciously abused too, using it to drive someone's taxes up until they're forced to sell.