On Radical Markets • Hacker News Board

Re: On Radical Markets

#11

Post by CptFribble » Wed, Apr 25, 2018, 3:50 AM UTC

Wouldn't the self-assessed tax lead to unfair competitive practices? Imagine a small bookstore opening in the same town as a Barnes and Noble. What if there's no tax level that the small store can afford that prevents a mega-corp like B&N from buying out their property?

Imagine you live in a neighborhood with deep community or family ties. Someone down the street wins the lottery/makes an 8-figure exit and wants to buy out the block for a mega mansion. Can tax rates be low enough for you to raise your own valuation to "defend" your middle class home against vast wealth? What does that do to local government revenues?

The very rich regularly spend $15m or more on a home. If Jeff Bezos came by my house and decided he liked the view, I would have to start paying $300k in taxes or move (if 2% tax). I get that making $15m for my house would make me rich, but this is our first home as a family and all our memories are here. I shouldn't be forced to choose like that - protection from arbitrarily being forced out of my home is one of the main reasons to own a home in the first place.

Re: On Radical Markets

#12

Post by dpc_pw » Wed, Apr 25, 2018, 4:35 AM UTC

CptFribble wrote: post #11

Wouldn't the self-assessed tax lead to unfair competitive practices? Imagine a small bookstore opening in the same town as a Barnes and Noble. What if there's no tax level that the small store can afford that prevents a mega-corp like B&N from buying out their property? Imagine you live in a neighborhood with deep community or family ties. Someone down the street wins the lottery/makes an 8-figure exit and wants to b…

> What if there's no tax level that the small store can afford that prevents a mega-corp like B&N from buying out their property?

Be bookstore owner. Set the value to be twice as much as comparable neighbor property. Get bought by B&N. Buy property next to you, move your books, pocket the difference.

> I get that making $15m for my house would make me rich, but this is our first home as a family and all our memories are here.

Price it accordingly. :)

Yes, the whole idea is that the tax is much lower (1% maybe) than the value of the land.

Also, some regulations might be added, that eg. a person who got forcefully bought-out, has a year or two to move out, just to make it less convenient to use it "aggressively", while allowing wise long-term investments.

Re: On Radical Markets

#13

Post by JumpCrisscross » Wed, Apr 25, 2018, 4:58 AM UTC

> Consider a system where property owners themselves specify what the value of their property is, and pay a tax rate of, say, 2% of that value per year. But here is the twist: whatever value they specify for their property, they have to be willing to sell it to anyone at that price

Valuing an asset takes work. The process consumes resources. There is a reason we have brokers for assets where one needs someone standing ready to auction. Making this proposal belies a fundamental misunderstanding of the history of markets.

Re: On Radical Markets

#14

Post by gojomo » Wed, Apr 25, 2018, 5:34 AM UTC

JumpCrisscross wrote: post #13

> Consider a system where property owners themselves specify what the value of their property is, and pay a tax rate of, say, 2% of that value per year. But here is the twist: whatever value they specify for their property, they have to be willing to sell it to anyone at that price Valuing an asset takes work. The process consumes resources. There is a reason we have brokers for assets where one needs someone standin…

But property taxes already face this challenge: the assessing authority has to specify a value – which may then be disputed by the property-owner in a costly appeals process.

This proposal lets the actor with the keenest interest and best knowledge of the property set a value, and lets the 'challenge' occur in the marketplace, by someone who's willing to buy it at that price. It lets the "brokers" and other experts of the world set the assessed value, by their actions (or potential actions), at a higher resolution than the current processes (which wait for actual sales or later bureaucratically-settled re-assessments).

Re: On Radical Markets

#15

Post by glifchits » Wed, Apr 25, 2018, 6:15 AM UTC

JumpCrisscross wrote: post #13

> Consider a system where property owners themselves specify what the value of their property is, and pay a tax rate of, say, 2% of that value per year. But here is the twist: whatever value they specify for their property, they have to be willing to sell it to anyone at that price Valuing an asset takes work. The process consumes resources. There is a reason we have brokers for assets where one needs someone standin…

Vitalik acknowledges your point:

"... people are not experts at property valuation, and would have to spend a significant amount of time and mental effort figuring out what self-assessed value to put for their house, and they would complain much more if they accidentally put a value that’s too low and suddenly find that their house is gone."

The solution: users would choose an AI to generate real time valuations.

In the property/personal home context, I think this is a bad idea, because if the AI gets it wrong, and you're forced to sell your house, that is bad. However, this idea could work very well in other types of property markets (this was all discussed in the article).

Re: On Radical Markets

#16

Post by glifchits » Wed, Apr 25, 2018, 6:20 AM UTC

CptFribble wrote: post #11

Wouldn't the self-assessed tax lead to unfair competitive practices? Imagine a small bookstore opening in the same town as a Barnes and Noble. What if there's no tax level that the small store can afford that prevents a mega-corp like B&N from buying out their property? Imagine you live in a neighborhood with deep community or family ties. Someone down the street wins the lottery/makes an 8-figure exit and wants to b…

I think the property/personal home example is hard to defend. Consider industrial property, such as a factory or warehouse. The most reasonable application of self-assessed tax would be to any property that can be valued on purely economic/objective bases.

Re: On Radical Markets

#17

Post by joosters » Wed, Apr 25, 2018, 7:04 AM UTC

tw1010 wrote: post #3

I like how engineers have expanded their ambition from starting as almost clerks to scientists (when the job of a programmer was almost exclusively data entry a few decades ago) to nowdays feeling like they can understand and modify everything in society with these powerful tools below their fingertips.

Vitalik can’t get his own flawed cryptocurrency to be useful or usable (except for scammers) and yet he wants to tell everyone how to solve the rest of the world’s problems?

Re: On Radical Markets

#18

Post by snidane » Wed, Apr 25, 2018, 7:37 AM UTC

glifchits wrote: post #15

JumpCrisscross wrote: post #13

> Consider a system where property owners themselves specify what the value of their property is, and pay a tax rate of, say, 2% of that value per year. But here is the twist: whatever value they specify for their property, they have to be willing to sell it to anyone at that price Valuing an asset takes work. The process consumes resources. There is a reason we have brokers for assets where one needs someone standin…

Vitalik acknowledges your point: "... people are not experts at property valuation, and would have to spend a significant amount of time and mental effort figuring out what self-assessed value to put for their house, and they would complain much more if they accidentally put a value that’s too low and suddenly find that their house is gone." The solution: users would choose an AI to generate real time valuations. In…

There is clearly problem with the immediate nature of such market, that is being forced to move out quickly out of a property if one undervalues it.

Then there is clearly the problem with current market set up, which basically allows people to trade with infinite length property rights, especially on land. This gives incentive to buy and never sell, because you know that new generations will have to live somewhere and you will be the one able to provide this service. Esentially leading back to pure feudalism.

A middle ground solution could be to make the land market with land tax not immediate, ie. sell whenever someone else outbids you, but as auction for the property every, let's say, 7 years.

This would give you enough time to consider investing into the property withou losing it right away due to trivial underpricing. It would also solve the optimal property allocation, just on longer term. Another advantage for agricultural land would be that a piece of land couldn't enter the market unless it underwent the seventh sabbatical year of resting, which you could actually enforce under this system.

Re: On Radical Markets

#19

Post by notahacker » Wed, Apr 25, 2018, 8:57 AM UTC

seiferteric wrote: post #2

I like the self assessed property tax idea, although presumably if someone wants to buy your property and you are not ready to sell, you should be able to "correct" the assessment and pay the back taxes (for the year only) in order to discover the true price.

That sounds like a case for absolutely everyone to undervalue their property unless and until someone wants to buy it (and speculators have little incentive to try to buy houses when nobody actually accepts offers at the low rates implied by their tax valuations)

Re: On Radical Markets

#20

Post by bildung » Wed, Apr 25, 2018, 9:25 AM UTC

glifchits wrote: post #15

JumpCrisscross wrote: post #13

> Consider a system where property owners themselves specify what the value of their property is, and pay a tax rate of, say, 2% of that value per year. But here is the twist: whatever value they specify for their property, they have to be willing to sell it to anyone at that price Valuing an asset takes work. The process consumes resources. There is a reason we have brokers for assets where one needs someone standin…

Vitalik acknowledges your point: "... people are not experts at property valuation, and would have to spend a significant amount of time and mental effort figuring out what self-assessed value to put for their house, and they would complain much more if they accidentally put a value that’s too low and suddenly find that their house is gone." The solution: users would choose an AI to generate real time valuations. In…

* > The solution: users would choose an AI to generate real time valuations.*

Sadly this isn't a solution, it just adds another layer of complexity to the decision making process. AI isn't magically unbiased, there's a multitude of ways for human bias/ particular interests to enter the model, from feature selection to model layout up to interpretation of the results.

So now people have to be both experts at assessing housing and neighborhood values and AI to make an informed decision.

That's the big problem of market-based social designs: There's always the fundamental asymmetry between a professional, better-equipped actor (a corporation specialized in that particular market, or a rich person like the bezos example, who can outsource that to employees) and a normal person.

Regulation, society's solution to that problem, tries to level the field: People knowledgable in the problem domain think about possible negative externalities and risks to citizens, and implemenent barriers for abuse.