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Here’s a self-enforcing protocol for determining property tax: the homeowner decides the value of the property and calculates the resultant tax, and the governm

Here’s a self-enforcing protocol for determining property tax: the homeowner decides the value of the property and calculates the resultant tax, and the government can either accept the tax or buy the home for that price. Sounds unrealistic, but the Greek government implemented exactly that system for the taxation of antiquities. It was the easiest way to motivate people to accurately report the value of antiquities. Yeah, it does sound unrealistic. What if the homeowner truthfully and in good faith reports an accurate value for their home, and the government decides to purchase it anyways? I would not like the government to have the ability to instantly render me homeless.

run4yourlives 17y ago
What if the homeowner truthfully and in good faith reports an accurate value for their home, and the government decides to purchase it anyways? That assumes that the government can't already do this. They most certainly can. Even better, they can do stupid things like build High-tension powerlines the next lot over, rezone your lot into industrial, etc, etc. This doesn't really give the government any more power, but it removes a lot of red tape, plus it ensures you get fair market for your home. Assuming you over-report the value, you'd be making a profit on the sale - enough that moving wouldn't be much of a issue for you. It's actually quite brilliant as it has the effect of raising taxes! If my home is market valued at $500K, I'd probably suggest I pay taxes on $550K, just so that I'd have that extra $50K in pocket if I'm inconvieneced.
- codyrobbins 17y ago
  Sure, the government can already do this, but certainly not so easily. Things like building high-tension powerlines or rezoning require many steps involving proposals, reviews, environmental impact studies, community input, etc. before final approval. There's also eminent domain, which I didn't mention, but again even that requires lots of review, justification, general consensus, and approval. There is definitely a difference between those things and the government being able to arbitrarily seize your property with no justification at all, other than that you've arguably undervalued it, regardless of whether they pay you what you valued it at. So, while this may not really give the government power that it doesn't already have per se, what it's doing is removing a ton of barriers. Assuming you over-report the value, you'd be making a profit on the sale - enough that moving wouldn't be much of a issue for you. This is assuming that all you care about is money. What if you don't want to give up your home regardless of how much they pay you for it? There are some things people are not willing to sell for any price. And being forced to relocate would be far more than an inconvenience to some people. In these cases, how much should you be forced to overvalue your home by as insurance that the government won't arbitrarily seize it if you get on someone's bad side? 25%? 50%? 200%?
  - run4yourlives 17y ago
    Again, this doesn't give the government any more power than it already has. If they want your home, they will seize it. Arguing that the government needs to jump through hoops is some sort of defence to you isn't relevant. They can and do jump through those hoops all the time, and home-owners are left with assessed values that certainly don't reflect the value of the home to them. In the Greek system, the home-owner can arbitrarily decide what their home means to them, by assigning a value to it themselves. I'm not sure how you take this to mean that the government will suddenly decide to buy up undervalued homes throughout the city. That doesn't make any sense. The government is not a real estate firm, and there is no benefit to them or the taxpayers to saddle themselves with property instead of taking a short of a few hundred dollars, which they will more than make up from people who do value their homes. They'll continue to act as they always have, Rezoning and developing as they see fit. In this case however, people will be offered fair value for their homes - fair, because they've priced the house themselves. So to answer you question, if your house is truly worth so much to you that you would be crushed if the government decided to build a highway where you live, yes, you do price it a 200% (and pay the taxes as such). The Greek system gives you this choice. Under current North American systems, you'll get the assessed value and be told to bugger off. If you're really lucky this will happen during a recession when your assessed value is lower and most construction projects occur. If you're really, really lucky they'll build something next to your lot, force you to take them to court, then offer to settle at the new, post development assessed price. The Greek system wins in my mind in all cases where a government would look to seize property from an owner.
    - donaldc 17y ago
      Arguing that the government needs to jump through hoops is some sort of defence to you isn't relevant. They can and do jump through those hoops all the time, and home-owners are left with assessed values that certainly don't reflect the value of the home to them. Of course it's relevant. The easier it is for the government to snap up any property it feels like on a whim, the more frequently this will happen. The fact that it is sometimes useful and necessary for the government to exercise eminent domain doesn't mean there shouldn't be restrictions.
- frossie 17y ago
  The property tax model is a deeply flawed idea because it is subject to a kind of DoS attack. If everybody valued their home at 50% of its FMV, the government would not be able to afford to buy everybody's home. Also, if everybody self-valued at say, 90% it would not be worth the government's hassle to buy everybody's home. The pie model works because there are only 2 players. The Greek antiquities thing works because there are probably only a few people that own priceless antiquities and the government is actually motivated to acquire more (because they would prefer they were in museums rather than private hands). So if everybody who owns antiquities self-priced them at 50% FMV, the government would probably be happy to snap them up. The property tax application would not really work because there are 1-to-many players and the 1 player doesn't really want the item - repossession is only used as a threat/punishment.
  - run4yourlives 17y ago
    >kind of DoS attack DoS requires a single actor with a distributed source. If everyone tomorrow decided that gold was worthless, it would be worthless. People don't work like that though. For every person undervaluing their home, there will be people that will overvalue it to the market. It's in the homeowner's interests to have a low taxation rate but a high assessed value. (Like hell I'm buying your house 30% over what you publicly think it is worth). There are two players, but only the owner is constant.
    - eru 17y ago
      Or solve the problem of homes by not only giving the government the right to buy at the nominal price stated for tax reasons --- but the general public.
jodrellblank 17y ago
"The Government XYZ" - what if Public Antique Evaluator Mr Corrup Tianou has a side business finding rare artworks, forcibly purchasing them for their declared value, then hooking them to the highest black-market bidder?
- eru 17y ago
  That would make the market more efficient.

run4yourlives 17y ago

What if the homeowner truthfully and in good faith reports an accurate value for their home, and the government decides to purchase it anyways? That assumes that the government can't already do this. They most certainly can. Even better, they can do stupid things like build High-tension powerlines the next lot over, rezone your lot into industrial, etc, etc. This doesn't really give the government any more power, but it removes a lot of red tape, plus it ensures you get fair market for your home. Assuming you over-report the value, you'd be making a profit on the sale - enough that moving wouldn't be much of a issue for you. It's actually quite brilliant as it has the effect of raising taxes! If my home is market valued at $500K, I'd probably suggest I pay taxes on $550K, just so that I'd have that extra $50K in pocket if I'm inconvieneced.

codyrobbins 17y ago
Sure, the government can already do this, but certainly not so easily. Things like building high-tension powerlines or rezoning require many steps involving proposals, reviews, environmental impact studies, community input, etc. before final approval. There's also eminent domain, which I didn't mention, but again even that requires lots of review, justification, general consensus, and approval. There is definitely a difference between those things and the government being able to arbitrarily seize your property with no justification at all, other than that you've arguably undervalued it, regardless of whether they pay you what you valued it at. So, while this may not really give the government power that it doesn't already have per se, what it's doing is removing a ton of barriers. Assuming you over-report the value, you'd be making a profit on the sale - enough that moving wouldn't be much of a issue for you. This is assuming that all you care about is money. What if you don't want to give up your home regardless of how much they pay you for it? There are some things people are not willing to sell for any price. And being forced to relocate would be far more than an inconvenience to some people. In these cases, how much should you be forced to overvalue your home by as insurance that the government won't arbitrarily seize it if you get on someone's bad side? 25%? 50%? 200%?
- run4yourlives 17y ago
  Again, this doesn't give the government any more power than it already has. If they want your home, they will seize it. Arguing that the government needs to jump through hoops is some sort of defence to you isn't relevant. They can and do jump through those hoops all the time, and home-owners are left with assessed values that certainly don't reflect the value of the home to them. In the Greek system, the home-owner can arbitrarily decide what their home means to them, by assigning a value to it themselves. I'm not sure how you take this to mean that the government will suddenly decide to buy up undervalued homes throughout the city. That doesn't make any sense. The government is not a real estate firm, and there is no benefit to them or the taxpayers to saddle themselves with property instead of taking a short of a few hundred dollars, which they will more than make up from people who do value their homes. They'll continue to act as they always have, Rezoning and developing as they see fit. In this case however, people will be offered fair value for their homes - fair, because they've priced the house themselves. So to answer you question, if your house is truly worth so much to you that you would be crushed if the government decided to build a highway where you live, yes, you do price it a 200% (and pay the taxes as such). The Greek system gives you this choice. Under current North American systems, you'll get the assessed value and be told to bugger off. If you're really lucky this will happen during a recession when your assessed value is lower and most construction projects occur. If you're really, really lucky they'll build something next to your lot, force you to take them to court, then offer to settle at the new, post development assessed price. The Greek system wins in my mind in all cases where a government would look to seize property from an owner.
  - donaldc 17y ago
    Arguing that the government needs to jump through hoops is some sort of defence to you isn't relevant. They can and do jump through those hoops all the time, and home-owners are left with assessed values that certainly don't reflect the value of the home to them. Of course it's relevant. The easier it is for the government to snap up any property it feels like on a whim, the more frequently this will happen. The fact that it is sometimes useful and necessary for the government to exercise eminent domain doesn't mean there shouldn't be restrictions.
frossie 17y ago
The property tax model is a deeply flawed idea because it is subject to a kind of DoS attack. If everybody valued their home at 50% of its FMV, the government would not be able to afford to buy everybody's home. Also, if everybody self-valued at say, 90% it would not be worth the government's hassle to buy everybody's home. The pie model works because there are only 2 players. The Greek antiquities thing works because there are probably only a few people that own priceless antiquities and the government is actually motivated to acquire more (because they would prefer they were in museums rather than private hands). So if everybody who owns antiquities self-priced them at 50% FMV, the government would probably be happy to snap them up. The property tax application would not really work because there are 1-to-many players and the 1 player doesn't really want the item - repossession is only used as a threat/punishment.
- run4yourlives 17y ago
  >kind of DoS attack DoS requires a single actor with a distributed source. If everyone tomorrow decided that gold was worthless, it would be worthless. People don't work like that though. For every person undervaluing their home, there will be people that will overvalue it to the market. It's in the homeowner's interests to have a low taxation rate but a high assessed value. (Like hell I'm buying your house 30% over what you publicly think it is worth). There are two players, but only the owner is constant.
  - eru 17y ago
    Or solve the problem of homes by not only giving the government the right to buy at the nominal price stated for tax reasons --- but the general public.

jodrellblank 17y ago

"The Government XYZ" - what if Public Antique Evaluator Mr Corrup Tianou has a side business finding rare artworks, forcibly purchasing them for their declared value, then hooking them to the highest black-market bidder?

eru 17y ago
That would make the market more efficient.