If taxes are to be levied, or income imputed, on the basis of the value of agricultural and/or residential properties, it is important that assessment procedures be adopted which estimate the true economic value of property with reasonable accuracy. […] The economist’s answer to the assessment problem is simple and essentially foolproof: allow each property owner to declare the value of his own property, make these declared values a matter of public record, and require that an owner sell his property to any bidder who is willing to pay, say, 20 percent more than the declared value. This simple scheme is self-enforcing, allows no scope for corruption, has negligible costs of administration, and creates incentives, in addition to those already present in the market, for each property to be put to that use in which it has the highest economic productivity. The beauty of this scheme, so evident to economists, is not, however, appreciated by lawyers, who object strongly to the idea of requiring the sale of properties, possibly against the will of their owners. The economist can retort here that if owners value their property at the price at which they would be willing to sell, they should not be unwilling to sell at a price 20 percent higher.
Arnold Harberger, ‘Issues of Tax Reform in Latin America’, Fiscal Policy for Economic Growth in Latin America: Papers and Proceedings of a Conference Held in Santiago, Chile, December, 1962; under the Auspices of Joint Tax Program Organization of American States, Inter-American Development Bank, Economic Commission for Latin America, Baltimore, Maryland, 1965, p. 290