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> There are many industries and companies where the economics of the business essentially require large companies to be viable. Well, then obviously these comp

> There are many industries and companies where the economics of the business essentially require large companies to be viable. Well, then obviously these companies would not experience price competition from smaller companies when they pass the tax on to the consumer, right? I don't see how that's a problem. If there's a demand for the product, it will be built. It will just be cheapest to build it in the smallest company. Larger companies could still persist at it if their size confers cost savings over the cost of the tax. The point is, rather than having all the financial wizards trying to figure out how to hide money and feed monolithic behemoths, they instead will be working on how to carve themselves up into independent pieces that can be held accountable.

aetherson 14y ago
It favors high unit margins. This is a law that says, "Corporation, if your gross sales profit is $200 million, you're way better off if your gross sales revenue is $1 billion instead of $10 billion." But high unit margins are terrible. First of all, they mean higher consumer prices, which are bad in and of themselves. But also, that unit margin either becomes corporate profit (in which case it makes richer the stockholders of the company, who will, ceteris paribus, be wealthier on average than the consumers paying that cost), or it gets eaten up by the management of the company (in which case it makes richer the executives of the company, who will, ceteris paribus, be wealthier on average than the consumers paying the cost). It is crazy to suggest that we should pursue a policy that increases consumer prices and redistributes that wealth to the wealthy.
- fluidcruft 14y ago
  If there is demand of $10 billion for buying a service/product, it can be satisfied by 10x$1 billion companies or 1x$10 billion company. Shouldn't increased competition keep prices down? (and if not why not do the obvious and fast-forward to the inevitable single-employer economy?)
  - aetherson 14y ago
    "Competition" doesn't just keep prices down magically. Competition keeps prices down when firms compete to increase market share at the price of unit margin. But the point is, you're weakening that. You're making market share less valuable, and unit margin more valuable. So you'll tip the scale more in the direction of high-margin, low-market-share organizations.
    - sageikosa 14y ago
      And with more enterprises floating around, stockbrokers would definitely have more to do, and I thought the idea was to get rid of them. Gosh, this forcing fiscal motivators on people sure causes some tricky unintended consequences.
  - deleted 14y ago
    [deleted]

aetherson 14y ago

It favors high unit margins. This is a law that says, "Corporation, if your gross sales profit is $200 million, you're way better off if your gross sales revenue is $1 billion instead of $10 billion." But high unit margins are terrible. First of all, they mean higher consumer prices, which are bad in and of themselves. But also, that unit margin either becomes corporate profit (in which case it makes richer the stockholders of the company, who will, ceteris paribus, be wealthier on average than the consumers paying that cost), or it gets eaten up by the management of the company (in which case it makes richer the executives of the company, who will, ceteris paribus, be wealthier on average than the consumers paying the cost). It is crazy to suggest that we should pursue a policy that increases consumer prices and redistributes that wealth to the wealthy.

fluidcruft 14y ago
If there is demand of $10 billion for buying a service/product, it can be satisfied by 10x$1 billion companies or 1x$10 billion company. Shouldn't increased competition keep prices down? (and if not why not do the obvious and fast-forward to the inevitable single-employer economy?)
- aetherson 14y ago
  "Competition" doesn't just keep prices down magically. Competition keeps prices down when firms compete to increase market share at the price of unit margin. But the point is, you're weakening that. You're making market share less valuable, and unit margin more valuable. So you'll tip the scale more in the direction of high-margin, low-market-share organizations.
  - sageikosa 14y ago
    And with more enterprises floating around, stockbrokers would definitely have more to do, and I thought the idea was to get rid of them. Gosh, this forcing fiscal motivators on people sure causes some tricky unintended consequences.
- deleted 14y ago
  [deleted]