Chiang Mai Dapps 2/11/20 - Harberger Tax Definition - Stephan King

this is tax and it's a very simple idea where you basically change property rights to rebalance the tension between communal ownership and private ownership toward more type of communal ownership and why do you want to do that but the reason that people do it is that it makes the allocation of resources more efficient in one sense that could matter to you and less efficient in another sense so you have to keep balanced at the harbor context is the tax that you pay on property that you own when you estimate our value it is you were forced to estimate the value of this property and so for example I have a house and I'm saying that this house is worth $100,000 then I tax rate on that estimate that I make myself in examples given a 7% there is some sort of ideal to measure according to the certain calculations so then I would have the penny $7,000 a year property tax on being the owner of this hundred thousand dollar house but if anybody walks up to me is this okay you say your house is worth $9,000 here's $100,000 it's not my house so you are forced to sell at the price they do estimate your property to be act and I would say it's like a similar to Dad's game or to the situation where when you're a kid and you have a brother or sister and there's a piece of pie that needs to be divided up and so that get you getting the bigger piece and then one kid has to has to cut the pie and the other kid gets to choose which party in and make sure that they get a fair division right so I think this is an expansion of that idea like if you really want to avoid your property tax then you can estimate your property to be worth almost nothing but then anybody and say well I think that your property is worth more I can make that more productive like suppose it's not a house we live in but a capital asset for business then this automatically leads to a situation where every piece of property is owned by the person who can make that the most productive so the applicatives efficiency is optimal now this this is introduced in in this paper here the broader set of concepts that are in the same family so in this book is both radical markets they talk about roughly these five different ideas and one of them the first one they talk about is this harberger tax and it comes from the criticism that they start with in Sears his title property is monopoly so what do you get if you have traditional property rights by being mostly are familiar with is that it's possible for someone to hold on to an asset and not make it all that productive and just say like I want some really high price what was that like I'm going to speculate on this piece of land over here because five years from now there's going to be a Hyperloop and then you have to pay through the nose to actually build your train track or your railroad or whatever you know and and so you are actually acting like a monopolist there and as we know from economics 101 when there's a monopoly that's not actually a very efficient thing like they they get a larger share of the wealth in the trades in the advantage between a customer and the booster the monopolist is actually acting so in an unfair way these abusing is economic power right so they expend that that consensus around what it means to a monopolist into even private property so you could say that and then somebody else to say productive community everybody use this so then in the solution to that problem the allocated efficiency and economy would be greater if you have this hardware tax concept so the problem is the that you examine a movie or your house and lots of money and you have to say yes someone offer your price whichever above my market price to get your property because for whichever reason what like suppose I was that music like it's supposed to be both agreed that this is a good property of our system and I live in a country or jurisdiction where this exists right then if somebody wants to have me out of the house they will have to pony up the cash to do that so it's a it's a fair in that sense but if they can afford to write so if you really don't want to move to a place no matter what doing I say hi hi guys everything how to bake a high taxes to live there yeah exactly okay so it really distorts the word like your house because that is the problem it's no longer really your house it's a communal property that is optimized worth some sort of notion of productivity and this was also like I tested this idea explained this idea to my girlfriend for example and she already had a lot of like various things about fairness and security or property everything went right off each other Lucas isn't this is a horrible system is just terrible and that was and I think that also my sense of property rights is also violated by this idea like I don't think I should be in a position where I might have to leave my house right now just because somebody gives me money right it changes your relationship Department and that makes into the the drawback of the system is that you have less investment agency if I am going to possibly be losing my house my property my factory my machines like next year then maybe I will not take all that much care of them so it is distorting my sense of ownership and investment so this is the drawback now let's this brings back to what we're talking about from my earring right so wrote a review essentially of this book or this idea over here like on radical markets he mostly talks about this this idea and [Music] like this is the sort of problem that you avoid with with a heart bigger text so obviously this guy was not learning to sell to the people that built that highway in that one specifically I know that they sold problem with government coercion they say look we gotta build this railroad in the real world is gonna be very straight and your figure is on for like your apple trees or on the railroad so you will have to sell but we will give you two or three times the market value of it so if somebody makes an assessment says that the market says this is probably worth this much and then you get two or three times point so you are for self but you are adequately compensated so we will pay for that guy yes yeah that's how I think a lot of Western democracies currently solve this problem so that's but [Music] my way they have a different idea of property rights so this is the talking okay so this might be a little bit esoteric for the people that didn't do economics one on one but this is one other concept that mr. harberger came up with that sort of ties into this idea that the efficiency of economy as a whole would be improved and this little triangle over here so if you conceive of traditional property as being done in a monopolistic situation then you will lose the benefit of the consumer that is this part and it will be distorted so like I don't want to spend too much time on this it's very specialist but if you stare this craft long enough you understand and what the benefits for society would be in the ideal situation if we organize property in this way so now of course as in theory and developers you guys might want to ask yourself how can i implement this theory or in a block change situation right so I've been doing some sociation on that for myself and he actually created this one contract that defines this concept of Architects so you can create an asset on the book chain that has here are some examples of use cases property I didn't go into the details of this because personally most interested in that experiment but when having a virtual property bias and I spend a lot of time thinking about this three years ago when I was working on this project for each head where we have virtually out of world where there is scarce property and people have to pay tax to get the right as a payment for the virtual army that's the same thing to see in a virtual game war so but there is this situation that the interpreter that makes the most use of the virtual real estate will be automatically owning it because they are ones that are first going to take the risk of occupying it and then try to make it corrective and if they cannot afford to pay the tax then they will be incentivized to sell to somebody who can so we've already have this crude version of this Hardware context in this game situation but now I'm thinking like we can probably implement a much more clean version of it in situation