[jandrewrogers]

This does not pass basic scrutiny unless the plan is to ruin average homeowners that valued their assets at fair market value.

Essentially, you want to force asset owners to write an at-the-money call option against their assets, and then adding insult to injury by not paying them an offsetting risk premium. I don't know how any moral person could be a proponent of the kinds of abuse and profitable exploitation of average people this proposal would trivially enable.

[eru]

You are being overly dramatic.

Yes, you would be forcing people to write a call option. It doesn't have to be at-the-money. Owners just pick a price that they'd be happy to sell at. Not some mystical 'fair market value' that would ruin them.

Of course, land owners would want to keep their tax bill low, so picking the right price to declare is a trade-off.

> [...] and then adding insult to injury by not paying them an offsetting risk premium.

Please be more careful in your reasoning! You are right that the call option is worth a premium. But that obligation to write the call option comes with ownership of the land, so we can just treat it as another (small) tax on the land. The market price of the land adjusts so that the yearly benefit from owning the land is pretty close to the yearly cost of capital plus sum of all taxes.

To simplify: the option premium is automatically offset by lower LVT payments.

> I don't know how any moral person could be a proponent of the kinds of abuse and profitable exploitation of average people this proposal would trivially enable.

Please elaborate. But please refrain from assuming that landowners are morons.

[avar]

I'm not proposing anything novel, just describing the Harberger Tax (https://en.wikipedia.org/wiki/Harberger_Tax), or a variant thereof.

In particular the book by Glen Weyl mentioned in that article describes how it could work in more detail, and in a way that address the concerns you have.

A relevant except from that book (which I've got a Kindle copy of):

> For any tax rate below the turnover rate, the possessor will always set a price above the amount she is willing to accept[43]. When the tax rate is zero, the possessor is free to set any price she wishes at no cost and thus would set the monopoly price. When the tax rate equals the turnover rate, she has to reveal her true value. For intermediate tax rates, she will still be discouraged by the tax from setting a very high price, but she will not have a full incentive to report her exact value. Instead, she will set a price intermediate between her true value and the monopoly price that she expects a buyer to be willing to pay. As the tax rises from zero to the turnover rate, the price she quotes will gradually fall from the monopoly price to her true value.

That 43rd footnote in particular further addresses your exact concern (the mentioned "COST" stands for "common ownership self-assessed tax"):

> 43.: This fact helps allay two potential objections to a COST: that possessors may wish to “sabotage” the appeal of their goods to others to avoid their interest in taking the good, and that predatory outsiders may maliciously take goods just to harm a possessor. Notice that neither of these are possible if possessors always set prices above the minimum they would be willing to accept, because in this case the possessor is happy when her possessions are taken: she still profits, just not as much as if she set a monopoly price. Thus “predation” will be nearly as welcome as would be the “predation” of someone offering you out of the blue an extravagant sum for your home and you would never wish to sabotage your possessions as this would reduce the chance of such an exceptional opportunity. Only individuals who fraudulently report extremely low values and try to dramatically sabotage their goods would be open to predation, but so they should, and such individuals are likely to be caught by others before too much sabotage is possible.