Recall there are two goals:
- allocative efficiency (property belongs to whomever can derive most value from it)
- investment efficiency (people have incentives to invest in property, build Gigafactories, etc)
If I understand, your argument is that self-assessed taxes would eliminate investment efficiency.
The property owner should factor transaction costs into their own value of the building. This would increase their assessment of the land-value, and increase their taxes. This works because, keeping land valuations constant, the one with the highest transaction costs is the one who can derive the most efficiency from the land.
If I understand, your argument is that self-assessed taxes would eliminate investment efficiency.
The property owner should factor transaction costs into their own value of the building. This would increase their assessment of the land-value, and increase their taxes. This works because, keeping land valuations constant, the one with the highest transaction costs is the one who can derive the most efficiency from the land.