the radicalXChange people have revitalized a somewhat older idea, harberger taxation. The mechanism is relatively straight forward, people self-assess the value of their stuff and pay a periodical tax on it. At any point in time, anyone can force the sale of said commodity.
Point being that if someone sets the price at above market rate, they're reducing allocative efficiency (by exercising monopoly power over their property) so they pay a tax. If goods are exchanged at market rate, then that improves the utilization of the property.
yes, that's the point (or rather the other way around). Taxing you for exercising a monopoly over a property that you only like for sentimental value, while someone else might put the property to productive use if they could purchase it at market rate is exactly the desired effect.
As a practical example, if you say, own a single home on a large plot of land in the middle of a city that desperately needs denser housing, then this tax imposes a cost on you if you self-assess the value highly / are unwilling to sell.
So you start a company. In addition to all the risks of a start-up, you have to deal with having to fire selling the shop if someone questions your assessed value? What do you think would happen when a powerful entity and a less-powerful entity disagree?
Nothing out of the ordinary really. If you were to put up your company at some multiple of its market value you'd either pay the tax or be bought out.
The only novel thing here is the tax btw, large corporations acquiring smaller companies at a multiple of their value is the wet dream of people who run startups
This example is a little contrived, but one could do something similar by just aggressively neglecting one's property.
I'm pretty sure laying traps like that is illegal, like felony illegal.
It seems straightforward to employ those versed in valuing various stores of wealth for the implementation of a wealth tax. Certainly, some assets might be more difficult to value than others (art, antiques, exotic vehicles, certain business ventures), but a value can be determined nonetheless. Real estate? Financial instruments? Effortless and automatable.
That's what insurance company are (perhaps) for: what are they covered for? That's what you tax them at.
There's also this idea, which could be useful for discouraging undervaluing assets for a wealth tax: the owner puts a value on the asset, and the tax authority has the option of purchasing it for that price. If someone tries to cheat the system by severely undervaluing their assets, their bluff can be quickly called.
Sounds like we are overthinking the problem and coming up with unreal scenarios
Basically, to disincentivize under-reporting the property's value for tax purposes.
Many, many business manage to get away with egregious undervaluing to avoid property taxes today. For instance (IIRC) Apple values some of its headquarters buildings at $1 for tax purposes using an egregious tax theory, and they've gotten away with it for some time. They wouldn't do that if Cupertino could literally force a sale of that building for $1, it would be too risky for them.