Property Attachments

Abstract

This essay critiques Eric Posner and Glen Weyl’s “common ownership self-assessed tax” (COST), which would place everyone’s belongings perpetually on the block at prices that the owners themselves choose (and must pay taxes on). Mechanisms for making self-assessed valuation the basis of both taxation and involuntary dispossession have been discussed by scholars for decades, but the Posner and Weyl proposal represents an unusually bold challenge to traditional notions of ownership: under their system, anyone could acquire anyone else’s property at any time by paying the self-assessed price. In the real property context, my focus here, the appeal of this approach and its insurmountable sticking point both come down to complementarities — or more colloquially, attachments. By breaking down ownership’s veto, COST would unlock new complementarities by allowing land and other resources to be assembled and reassembled in valuable combinations. But COST would neglect or disrupt other complementarities, including ones associated with people holding the same assets over time. It is not just that people get attached to the things they own (a phenomenon that may be endogenous to the existing structure of property rights), but also that nearby properties are connected in ways that make the valuation of separately owned entitlements deeply interdependent. Without accounting for these complementarities and for the superstructure of land use rights that currently address them, the COST proposal would be unworkable. Nonetheless, Posner and Weyl advance property theory by spotlighting a contradiction at the heart of ownership — its capacity to both encourage and impede efficient activity. Finding the best way to manage this tension is an increasingly pressing project, and Posner and Weyl’s work provides a timely catalyst.