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How to counter this: Just regulated the transfer of IP rights. If you sell say a patent portfolio for $50m to your British Virgin Island subsidiary, and then m

How to counter this: Just regulated the transfer of IP rights. If you sell say a patent portfolio for $50m to your British Virgin Island subsidiary, and then make $20bn in profits in the decade thereafter on that BVI sub, it appears the IP transfer was waaaaay below market value. And should retroactively be taxed in the US where we engineers had developed that stuff in the first place. Problem solved. US tax base restored. Government deficit fixed.

IMTDb 10y ago
Let's imagine an honest tech company that buys a 100 patents each year for 10 years. As usual : 90% of them and up being useless. 9.9% of them allow to make a good product that sell well and keeps them afloat. And one of those ends up being ground breaking pushing the company forward, allowing major innovation in their product line. In the current situation, the company placed a bet on those patents. They took risks, every year, for 10 years. And ended up being rewarded for it after some struggle and a lot of research. In your proposed situation, the company would put as much risk in buying the patents. Would still struggle for 10 years. Then, once the ground breaking product comes along and starts generating sales, authorities come in and ask for retroactive taxation because their crown jewel was "clearly under market value" That honest company would probably not stay in business for very long. Or would not even exist if the founders knew that would be the outcome.
- r00fus 10y ago
  Which honest company buys 100 patents a year and is either not flush with cash or patent troll (or both)?
- shaqbert 10y ago
  You got this wrong. My point is to not allow to sell IP from the US Inc to the British Virgin Island subsidiary Ltd for a handful of dollars, and deprive the US taxman of billions of earnings. That "ground breaking product" was developed in the US, thus the profits and taxes should be made there. I love US companies making boatloads of cash. I just hate them to get around paying normal taxes here.
astrodust 10y ago
What if you buy a derelict property (MySpace?) for a bargain at auction then make billions after you bring it back to prominence. Are you to saying you should be punished for your low acquisition cost?
cmurf 10y ago
If IP is really property, subject it to property tax. The valuation is of course an estimate, but if it were ever sold, there'd be a tax credit or debit, in arrears, without penalty but with sane interest. The only way to really get out of it is upon the expiration of the property's government granted monopoly status, i.e. turned over to the public.
nodamage 10y ago
In this particular case, Apple hasn't actually transferred its IP rights offshore, so this wouldn't actually change anything.

IMTDb 10y ago

Let's imagine an honest tech company that buys a 100 patents each year for 10 years. As usual : 90% of them and up being useless. 9.9% of them allow to make a good product that sell well and keeps them afloat. And one of those ends up being ground breaking pushing the company forward, allowing major innovation in their product line. In the current situation, the company placed a bet on those patents. They took risks, every year, for 10 years. And ended up being rewarded for it after some struggle and a lot of research. In your proposed situation, the company would put as much risk in buying the patents. Would still struggle for 10 years. Then, once the ground breaking product comes along and starts generating sales, authorities come in and ask for retroactive taxation because their crown jewel was "clearly under market value" That honest company would probably not stay in business for very long. Or would not even exist if the founders knew that would be the outcome.

r00fus 10y ago
Which honest company buys 100 patents a year and is either not flush with cash or patent troll (or both)?
shaqbert 10y ago
You got this wrong. My point is to not allow to sell IP from the US Inc to the British Virgin Island subsidiary Ltd for a handful of dollars, and deprive the US taxman of billions of earnings. That "ground breaking product" was developed in the US, thus the profits and taxes should be made there. I love US companies making boatloads of cash. I just hate them to get around paying normal taxes here.

astrodust 10y ago

What if you buy a derelict property (MySpace?) for a bargain at auction then make billions after you bring it back to prominence. Are you to saying you should be punished for your low acquisition cost?

cmurf 10y ago

If IP is really property, subject it to property tax. The valuation is of course an estimate, but if it were ever sold, there'd be a tax credit or debit, in arrears, without penalty but with sane interest. The only way to really get out of it is upon the expiration of the property's government granted monopoly status, i.e. turned over to the public.

nodamage 10y ago

In this particular case, Apple hasn't actually transferred its IP rights offshore, so this wouldn't actually change anything.