[jl2718]

Consider some numbers:

Let’s say that the bond rate is 2%, 1% goes to the bondholder, 1% goes to the treasury. Apple bonds the property of Joe’s plumbing for $1M with a 1 year duration. So Joe The Plumber either pays $10k a year to both Apple and the treasury, or takes $1M and moves.

If Joe can’t pay, then the banks will gladly lend against the property, because the payout is guaranteed. They will also very gladly lend for purchase of a new property for the same reason.

The system is actually no different to Joe. He still loses his property either way if he can’t pay the property tax. But now he has a liquid asset with zero transaction cost, so it works out a lot better for him either way.

And that 1% to the treasury could replace the entire income tax revenue of the country.

But it’s just an idea; there are things I’m not sure about.