Takings Reassessed
41 Pages Posted: 19 Apr 2001
Abstract
In this Essay, we challenge the conventional typology of constitutional takings by bringing to light a previously unrecognized type of taking-the derivative taking. We show that virtually every exercise of the power of takings generates derivative takings that have largely evaded takings scholars. Furthermore, we demonstrate that the failure of existing takings doctrine to account for derivative takings leads to inefficient and inequitable results. In particular, this failure disproportionately harms the poor.
To remedy this problem, we craft an economic model of self-assessment to optimize constitutional protection at low administrative cost. Importantly, our self-assessment mechanism incentivizes property owners to report truthfully the losses they suffer as a result of government takings. We accomplish this by basing our mechanism on the principle of probabilistic enforcement accompanied by weighted penalties on exaggerations. By lowering the administrative cost of compensation, our self-assessment mechanism enables the compensation of currently uncompensated property owners, and enhances economic efficiency as it forces the government to fully internalize the cost of its actions.
We further show that the utilization of our self-assessment mechanism can illuminate and resolve many of the shortcomings of existing takings doctrine. Our self-assessment mechanism may be used to compensate victims of physical takings and perform this function at a much lower cost than the judicial mechanism currently in place. Its utilization in the context of regulatory takings offers the opportunity to reduce dramatically the cost of administering claims and to clarify such currently ambiguous rules as when a regulation "goes too far" and becomes an exercise of the power of eminent domain. Finally, the information garnered from the self-assessment report may enable us to distinguish between uses of the taxation power that legitimately go uncompensated and takings that demand compensation. We submit that the aggregation of these effects would result in a better and fairer use of the takings power, and begin the process of injecting coherence into a desperately confused area of the law.
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