This note is a part of my Zettelkasten. What is below might not be complete or accurate. It
is also likely to change often.
Radical Markets presents a vision of a market without Allocation Efficiency due to monopoly or Investment Efficiency due to common ownership by using self assessment coupled with partial common ownership
The yearly tax rate is key in this to ensure that investment efficiency and allocation efficiency is maintained.
By maintaining the yearly tax rate at the turnover rate (the probability of the specific property changing hands that year), the system effectively puts every property owner in a Texas Shootout with the market, incentivising them to assess their property at the right price. Because if the owner prices it at a higher rate than actual, they will have to pay more tax. If they price it at a lower price, someone will buy it off them at a loss to them.
To maintain investment efficiency, the tax rate should be kept low to make sure that any investment made by the owner increases his returns from selling the property.
For example: If an owner invest 8k to increase a property value from 10k to 20k, taxed at 30%, they will have to pay 6k as tax and can be forced to sell at 20k, making them a loss of (10k+8k+6k)-20k = 4k. At 20%, its (10k+8k+4k)-20 = 2k loss. At 10%, its (10k+8K+2k)-20k = 0. Lower than 10% is good for investment efficiency in this example.
At any tax rate below the turnover rate however, the owner can price the property above the minimum they are willing to accept (all the way to infinite for 0 tax)
The claim of COST is that lowering the tax rate increases investment efficiency more than the loss of allocation efficiency. Increasing allocation efficiency and thereby lowering monopoly power has a quadratic effect on society. Even a 1% tax is good for lowering allocation efficiency while not affecting investment efficiency.
The "Right to Use" and "Right to exclude", both pillars of private property, are transferred from the owners to the public. The higher the interest rate, the more public owns these rights.
This is radically different from Central Planning as well since the Government doesnt set prices or allocate resources or assign people jobs. It creates a decentralized more dynamic marketplace.