The Property-Tax Bundle of Rights

Abstract

This Article introduces the concept of a property-tax bundle of rights. There i s no property without tax; tax inevitably affects property rights. America has settled into an absolute conception of the property-tax bundle, under which private individuals have absolute power over their property for all time after an initial payment of a flattened wage tax. The project of property, from Blackstone to Coase, has sought alignment of the private and public interests. The absolute conception works well for things. But neither property nor tax theory have checked the unlimited powers granted to the owners of private capital: Money has slipped through the cracks i n our thoughts. This Article traces the evolution of the absolute property-tax bundle through the death of all second taxes on capital and the Rule against Perpetuities. It then contrasts a fiduciary conception of the bundle, which changes tax from a flattened prepaid to a progressive postpaid or spending tax. This removes the right to waste from a property owner’s bundle of rights and thus generalizes an insight credited to Jefferson: The fiduciary conception places all wealth in usufruct for the living. It is a promising idea for a reasonable society in an age of great wealth and great inequality. The fiduciary conception ensures that America’s billionaires will maintain their wealth i n a common pool for the good of all, returning to the alignment of interests sought by liberal theorists at l east since Locke.