6 ms·

I think a better solution is exponential tax on a company size. I.e. once a company starts to earn above, say, 1 billion, it will be taxed by income by ever inc

by fpoling 11mo ago

I think a better solution is exponential tax on a company size. I.e. once a company starts to earn above, say, 1 billion, it will be taxed by income by ever increasing amount. Or put it another way, use taxes to break the power law and winner takes effect all into a Gaussian distribution of company sizes.

logancbrown 11mo ago
Ah yes, the same tax mentality that is working great for EU innovation.
- wqaatwt 11mo ago
  Corporate taxes specifically were quite high by European standards until 2027 and are not relatively that low today either
Terr_ 11mo ago
Is that revenue, or profit? If revenue, it'll slam certain kinds of high-volume low-profit businesses, and if it's profit then the company will just arrange to have big compensation "expenses" for executives. The latter would have to be backstopped by taxes on individual income.
- octoberfranklin 11mo ago
  The sane version of this proposal omits the "exponential" part, applies to profits (net income), and makes the tax rate industry-specific (just like Washington State's revenue tax).
- Hikikomori 11mo ago
  Set limits so the top cant earn more than x times the lowest paid in the company then.
  - steve_b 11mo ago
    Companies would then outsource their low-paying jobs to other companies.
    - esseph 11mo ago
      They already do
    - Hikikomori 11mo ago
      So make that count then.
- silon42 11mo ago
  revenue, obviously, but maybe it would scale with employee numbers... if you have lots of employees, you get taxed less.
  - deleted 11mo ago
    [deleted]
  - thfuran 11mo ago
    So the policy goal is to minimize revenue per employee?
philipkglass 11mo ago
This would permanently increase DRAM prices. Memory fabricators either earn billions of dollars in income each year or they can't keep going. There are no little Mom and Pop businesses that can do photolithography on leading process nodes.
- octoberfranklin 11mo ago
  Nonsense, it would force vertical de-integration. Chip fabs used to be like book publishers; you don't have to own a printing press to be an author. Carver Mead even described his vision of the industry that way. Nowadays you have to get your cell libraries and a large chunk of your toolchain from the fab. Of course it's laundered through cadence+synopsys, but it's still coming from the fab. You have to buy your masks from the fab (heck they aren't even allowed to leave the fab so do you really own them?). And on and on. For the record I don't agree with the "exponential" part, but otherwise this is an underappreciated and powerful technique.
  - philipkglass 11mo ago
    In another comment you proposed a sane version of the parent proposal. I wouldn't have commented if fpoling had originally floated that scheme. I was mainly objecting to drastically increasing taxes "once a company starts to earn above, say, 1 billion" without regard for the minimum viable scale of different businesses.
  - zer00eyz 11mo ago
    > Chip fabs used to be like book publishers; I can still make a book like that in my basement. People do this as a hobby now. You can still build chips like that in your garage. People do this as a hobby now. These things DO NOT SCALE... you cant have 10,000 people running printing presses in their basement to crank out the NYT every day. A modern chip fab has more in common with the printer for the NYT than it does with what you can crank out in your garage. Let's look at TSMC's plant in AZ. They went and asked intel "hey where are you sourcing your sulfuric acid from. When they looked at the American vendors TSMC asked intel "how are you working with this". Intels response was that it was the best they could get. It was not. TSMC now imports sulfuric acid from Taiwan, because it needs to be outrageously pure. Intel is doing the same. Every single part, component, step and setup in the chain is like that. There is so much arcane knowledge that loss of workers represents a serious set back. There are people in the production chain, with PHD's, who are literally training their successors because thats sort of the only option. Do you know who has been trying the approach you are proposing? China. It has not worked. https://www.youtube.com/asianometry https://www.youtube.com/asianometry probably the best rough and ready education you can get on the industry.
AnthonyMouse 11mo ago
> I think a better solution is exponential tax on a company size. I.e. once a company starts to earn above, say, 1 billion, it will be taxed by income by ever increasing amount. This is in the right spirit but you want two things to be different about it. The first is that the threshold for a given industry doesn't make sense as a dollar amount, it makes sense as a market share percentage. Having more than 15% market share should be a thing companies don't want, regardless of whether it's a $100 trillion industry or a $100 million one. And the second is that taxes create a perverse incentive for the government. You absolutely do not want the government to have even more of a financial incentive to sustain and create more of the companies of that size. What you want is to have fewer of them. So, what you want is a rule that if a company has more than 15% market share, the entire general public is allowed to sue them into bankruptcy for the offense of market consolidation. Which also removes the problem where they buy off the government prosecutors, because if they commit the offense then anybody can sue them.
- chii 11mo ago
  > anybody can sue them. who bears the costs of this suit? And who determines what makes for a good market share size to be the threshold? And by having such a rule, an industry that would have higher efficiency to when consolidated would not be able to (but you wouldn't know). It's a bad set of policy imho. A better way would be for gov't to increase competition by adding supply, or demand, whichever one is the bottleneck to competition. If a company, such as AWS, is getting a lot of marketshare, but their profit margins is still high, then the gov't should incentivize competition by funding or giving loans to businesses that want to compete with AWS. However, if AWS's profit margins, even at high market share, remains very low (e.g., amazon's commerce side), then there's no need for the gov't to "step in" at all, as there would be no incentive for any competitor to try enter the market due to low margins.
  - AnthonyMouse 11mo ago
    > who bears the costs of this suit? The goal is to not have it happen, because the company is going to see that they're only slightly below the threshold and voluntarily split themselves into smaller pieces and buy themselves a safety margin because if they don't everybody knows the lawsuits are going to vaporize them once they exceed the threshold. > And who determines what makes for a good market share size to be the threshold? Anything in the vicinity of 5%-15% would be fine. > And by having such a rule, an industry that would have higher efficiency to when consolidated would not be able to (but you wouldn't know). This is extremely rare and the circumstances where it happens aren't a mystery. It's when entering the market has extremely high fixed costs but then the unit cost of usage is negligible, e.g. it costs a huge amount of money to install water and sewer but then the incremental cost of someone washing their hands is insignificant. For those things you either have the government do them, or if it's a private company then it's a regulated utility which is completely banned from anything that even vaguely resembles vertical integration as the price of being allowed to have more than the threshold amount of market share. > A better way would be for gov't to increase competition by adding supply, or demand, whichever one is the bottleneck to competition. The problem is generally caused by the incumbents capturing the government and then enacting rules that inhibit rather than increase competition. That's why you need anyone to be able to initiate the lawsuit, so they can't capture the government department which is supposed to be thwarting them because then it's the entire public.

by fpoling 11mo ago

logancbrown 11mo ago

Ah yes, the same tax mentality that is working great for EU innovation.

wqaatwt 11mo ago
Corporate taxes specifically were quite high by European standards until 2027 and are not relatively that low today either

Terr_ 11mo ago

Is that revenue, or profit? If revenue, it'll slam certain kinds of high-volume low-profit businesses, and if it's profit then the company will just arrange to have big compensation "expenses" for executives. The latter would have to be backstopped by taxes on individual income.

octoberfranklin 11mo ago
The sane version of this proposal omits the "exponential" part, applies to profits (net income), and makes the tax rate industry-specific (just like Washington State's revenue tax).
Hikikomori 11mo ago
Set limits so the top cant earn more than x times the lowest paid in the company then.
- steve_b 11mo ago
  Companies would then outsource their low-paying jobs to other companies.
  - esseph 11mo ago
    They already do
  - Hikikomori 11mo ago
    So make that count then.
silon42 11mo ago
revenue, obviously, but maybe it would scale with employee numbers... if you have lots of employees, you get taxed less.
- deleted 11mo ago
  [deleted]
- thfuran 11mo ago
  So the policy goal is to minimize revenue per employee?

philipkglass 11mo ago

This would permanently increase DRAM prices. Memory fabricators either earn billions of dollars in income each year or they can't keep going. There are no little Mom and Pop businesses that can do photolithography on leading process nodes.

octoberfranklin 11mo ago
Nonsense, it would force vertical de-integration. Chip fabs used to be like book publishers; you don't have to own a printing press to be an author. Carver Mead even described his vision of the industry that way. Nowadays you have to get your cell libraries and a large chunk of your toolchain from the fab. Of course it's laundered through cadence+synopsys, but it's still coming from the fab. You have to buy your masks from the fab (heck they aren't even allowed to leave the fab so do you really own them?). And on and on. For the record I don't agree with the "exponential" part, but otherwise this is an underappreciated and powerful technique.
- philipkglass 11mo ago
  In another comment you proposed a sane version of the parent proposal. I wouldn't have commented if fpoling had originally floated that scheme. I was mainly objecting to drastically increasing taxes "once a company starts to earn above, say, 1 billion" without regard for the minimum viable scale of different businesses.
- zer00eyz 11mo ago
  > Chip fabs used to be like book publishers; I can still make a book like that in my basement. People do this as a hobby now. You can still build chips like that in your garage. People do this as a hobby now. These things DO NOT SCALE... you cant have 10,000 people running printing presses in their basement to crank out the NYT every day. A modern chip fab has more in common with the printer for the NYT than it does with what you can crank out in your garage. Let's look at TSMC's plant in AZ. They went and asked intel "hey where are you sourcing your sulfuric acid from. When they looked at the American vendors TSMC asked intel "how are you working with this". Intels response was that it was the best they could get. It was not. TSMC now imports sulfuric acid from Taiwan, because it needs to be outrageously pure. Intel is doing the same. Every single part, component, step and setup in the chain is like that. There is so much arcane knowledge that loss of workers represents a serious set back. There are people in the production chain, with PHD's, who are literally training their successors because thats sort of the only option. Do you know who has been trying the approach you are proposing? China. It has not worked. https://www.youtube.com/asianometry https://www.youtube.com/asianometry probably the best rough and ready education you can get on the industry.

AnthonyMouse 11mo ago

> I think a better solution is exponential tax on a company size. I.e. once a company starts to earn above, say, 1 billion, it will be taxed by income by ever increasing amount. This is in the right spirit but you want two things to be different about it. The first is that the threshold for a given industry doesn't make sense as a dollar amount, it makes sense as a market share percentage. Having more than 15% market share should be a thing companies don't want, regardless of whether it's a $100 trillion industry or a $100 million one. And the second is that taxes create a perverse incentive for the government. You absolutely do not want the government to have even more of a financial incentive to sustain and create more of the companies of that size. What you want is to have fewer of them. So, what you want is a rule that if a company has more than 15% market share, the entire general public is allowed to sue them into bankruptcy for the offense of market consolidation. Which also removes the problem where they buy off the government prosecutors, because if they commit the offense then anybody can sue them.

chii 11mo ago
> anybody can sue them. who bears the costs of this suit? And who determines what makes for a good market share size to be the threshold? And by having such a rule, an industry that would have higher efficiency to when consolidated would not be able to (but you wouldn't know). It's a bad set of policy imho. A better way would be for gov't to increase competition by adding supply, or demand, whichever one is the bottleneck to competition. If a company, such as AWS, is getting a lot of marketshare, but their profit margins is still high, then the gov't should incentivize competition by funding or giving loans to businesses that want to compete with AWS. However, if AWS's profit margins, even at high market share, remains very low (e.g., amazon's commerce side), then there's no need for the gov't to "step in" at all, as there would be no incentive for any competitor to try enter the market due to low margins.
- AnthonyMouse 11mo ago
  > who bears the costs of this suit? The goal is to not have it happen, because the company is going to see that they're only slightly below the threshold and voluntarily split themselves into smaller pieces and buy themselves a safety margin because if they don't everybody knows the lawsuits are going to vaporize them once they exceed the threshold. > And who determines what makes for a good market share size to be the threshold? Anything in the vicinity of 5%-15% would be fine. > And by having such a rule, an industry that would have higher efficiency to when consolidated would not be able to (but you wouldn't know). This is extremely rare and the circumstances where it happens aren't a mystery. It's when entering the market has extremely high fixed costs but then the unit cost of usage is negligible, e.g. it costs a huge amount of money to install water and sewer but then the incremental cost of someone washing their hands is insignificant. For those things you either have the government do them, or if it's a private company then it's a regulated utility which is completely banned from anything that even vaguely resembles vertical integration as the price of being allowed to have more than the threshold amount of market share. > A better way would be for gov't to increase competition by adding supply, or demand, whichever one is the bottleneck to competition. The problem is generally caused by the incumbents capturing the government and then enacting rules that inhibit rather than increase competition. That's why you need anyone to be able to initiate the lawsuit, so they can't capture the government department which is supposed to be thwarting them because then it's the entire public.