Harberger Tax: A New Model for Property Ownership and Efficiency
Traditional property ownership typically falls into two extremes: private ownership, where an individual has total control, or common ownership, where assets are held by the public. The Harberger Tax, also referred to as Common Ownership Self-assessed Tax (COST), introduces a hybrid approach. This model proposes a form of "partial ownership" designed to maximize societal welfare by balancing investment and allocative efficiency—the practice of ensuring resources are distributed to those who can use them most effectively.
How the Harberger Tax Works
The Harberger Tax operates through two primary, interlocking mechanisms that incentivize owners to value their assets honestly and efficiently.
- Self-Assessment: Property owners periodically determine the value of their own assets and pay a tax based on that self-assessed price.
- Forced Sale: To prevent owners from underreporting the value to avoid taxes, any other party can purchase the property from the owner at the current taxed price at any time.
[ไม่มีภาพประกอบ]
Historical Origins and Evolution
The concept was first proposed by American economist Arnold Harberger. It later gained widespread attention through the book Radical Markets: Uprooting Capitalism and Democracy for a Just Society, written by Glen Weyl and Eric Posner.
While the modern framework is associated with Harberger, Weyl, and Posner, a similar concept was proposed much earlier. In 1905, Sun Yat-sen suggested a system where the government acted as the entity capable of purchasing property from landowners if the self-assessed price was set too low.
Key Facts
- Alternative Name: Common Ownership Self-assessed Tax (COST).
- Primary Goal: To optimize both investment and allocative efficiency of private property.
- Ownership Type: A "partial ownership" model between private and common ownership.
- Core Mechanism: Combines periodic self-assessment with a permanent right of purchase for others.
- Key Figures: Arnold Harberger, Glen Weyl, Eric Posner, and Sun Yat-sen.
| Mechanism | Action | Purpose |
|---|---|---|
| Self-Assessment | Owner sets the property value | Determines the tax amount paid |
| Forced Sale | Buyer pays the self-assessed price | Prevents undervaluation and ensures efficient use |
Frequently Asked Questions
What is the main purpose of the Harberger Tax?
The main purpose is to improve societal welfare by optimizing for both investment efficiency and allocative efficiency, ensuring that private property is held by those who value it most.
How does the forced sale mechanism prevent tax evasion?
If an owner sets their property value too low to reduce their tax burden, they risk another person purchasing the property from them at that artificially low price.
Who popularized the Harberger Tax in recent years?
The concept was popularized by Glen Weyl and Eric Posner in their book, Radical Markets: Uprooting Capitalism and Democracy for a Just Society.
Did this idea exist before Arnold Harberger?
Yes, a similar idea was proposed by Sun Yat-sen in 1905, though in his version, the government was the entity that could purchase the property if the price was too low.
What is meant by "partial ownership"?
Partial ownership refers to a state where the owner has the right to use and profit from the property, but must accept a sale if someone else is willing to pay the owner's own assessed price.