6 ms·

This kind of indirect monetary "investment" to maintain the moats to your market reminds me a lot of how ridiculously cost effective lobbying can be to companie

This kind of indirect monetary "investment" to maintain the moats to your market reminds me a lot of how ridiculously cost effective lobbying can be to companies like Intuit. $10mm/year in lobbying can virtually guarantee that legislation remains in their favor, which blows any kind of product R&D in terms of ROI out of the water. It's frustrating and disheartening to read things like this, and yet the evil business side of me can't help but think, "damn that's evil but so smart of them..." :(

fragsworth 12y ago
> damn that's evil but so smart of them... But this kind of thing can often backfire if there's a public outcry and then it won't have been so smart.
- coldtea 12y ago
  It might back-fire for a few individuals at the company (e.g they might senf off a CEO or some department head with his golden parachute), but the company will continue doing it after the outcry stops...
- kolbe 12y ago
  All bark and no bite. Citizens of the US haven't stood up to any immoral corporate practice and had a significant impact in decades. For example, the makers of OxyContin could (completely hypothetically) manufacture an opiate so powerful it rivals heroin, encourage doctors to prescribe it at many times the necessary rate for true medical pain-relief, watch millions of lives get ruined by addiction to their supposedly safe drug, and no group of people will ever get together in protest to put more than a couple percent dent in their profits.
nikcub 12y ago
Economic term is regulatory capture: https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture relevant Onion from this week: http://www.theonion.com/articles/elderly-lobbyist-always-droning-on-about-how-littl,36793/ http://www.theonion.com/articles/elderly-lobbyist-always-dro...
- baddox 12y ago
  Regulatory capture is one of the results. The primary economic mechanic that causes this is special interests vs. dispersed interests: https://en.wikipedia.org/wiki/Public_choice#Special_interests https://en.wikipedia.org/wiki/Public_choice#Special_interest...
1stop 12y ago
What do intuit lobby for? Do they have some sort of monopoly? Note: (I'm Outside US)
- kyro 12y ago
  > "In the most technologically advanced countries, filing a tax return is free, easy and fast: Instead of taxpayers painstakingly calculating figures themselves, the government provides estimates of what they owe based on the very bank records and wages it already collects. Intuit, maker of the popular tax preparation software, TurboTax, has funnelled millions to oppose every effort to make tax day less painful." http://techcrunch.com/2013/03/27/turbotax-maker-funnels-millions-to-lobby-against-easier-tax-returns/ http://techcrunch.com/2013/03/27/turbotax-maker-funnels-mill...
  - judk 12y ago
    That makes no sense. Reporting income is is easy. The IRS will mail you a correction of you make an error. Deductions are the hard part, which is not govt tracked.
    - Crito 12y ago
      It's easy, but it is not as easy as it should be. They should be able to send me forms pre-filled for all of my sources of income (In my case, and in most cases, they already know all of that information. Some may still need to do some data entry.) What takes me a few hours could take me a few short minutes.
      - yid 12y ago
        Government doesn't move at Silicon Valley's pace. The ability to cheaply track your income from all sources and bill you directly for your taxes is barely a few decades old.
        lemming 12y ago
        Plenty of governments in other parts of the world already do this. In Spain (and I assume in most parts of Europe), the govt provides a draft of your return, which most people just accept through their internet bank.
rayiner 12y ago
> $10mm/year in lobbying can virtually guarantee that legislation remains in their favor, which blows any kind of product R&D in terms of ROI out of the water. This is oft-repeated, but doesn't stand up to any sort of logical scrutiny. You think there aren't dozens of parties with interests adverse to Intuit who could pony up $10 million to lobby for the opposite position? I think of this every time someone mentions lobbying by telecom or media companies: for what Facebook paid for WhatsApp, it could purchase all of the lobbying efforts of the top 10 D.C. lobbying firms for the next half-century. You think the Facebooks and Googles of the world are above buying legislation in business-critical areas like telecom policy or copyright if it were that cheap? What lobbying does is help you tap into a base of support that already exists. In the case of Intuit, their lobbying dollars go to supporting Republicans and Libertarians who don't want to make filing taxes easy. The cost and burden of filing taxes is a major hammer people use to chip away at the whole concept of progressive taxation. It's a major selling point of proposals like the flat tax or consumption taxes. In a system with employer withholding, it's the only major reminder of how much the government is taking out of your paycheck each year. That $10 million doesn't guarantee Intuit favorable legislation--it leverages a deep divide in the polity that happens to advance Intuit's specific interests. And at the end of the day, almost all effective lobbying, at least at the federal level, takes that shape.
- Crito 12y ago
  The $10mm/year is the meager carrot. There is an implied stick, which comes in the form of much stronger support for opposing candidates come the next election cycle. $10 million is nothing; any lobbying group worth a shit can cough up that. You could probably fucking crowdfund it if you found a cause that 'the internet' cared enough about. But to make a difference you also need to convince your congressperson that you also have a stick and are able/willing to use it. Good luck crowdfunding that. A company like facebook has the money to have a stick, but these sort of tech companies are typically politically inactive enough to raise doubt that they would have the motivation ever use their stick.
  - anigbrowl 12y ago
    I don't know why you're being downvoted - that's a pretty astute summary of the public choice theory problem. It's very hard to build an effective coalition for pragmatic pedestrian issues like making it easier to file taxes. Several presidential candidates have made it a plank in their platform but it's hard to get much traction for something people only think about once a year unless you also have a comfortable legislative majority.

fragsworth 12y ago

> damn that's evil but so smart of them... But this kind of thing can often backfire if there's a public outcry and then it won't have been so smart.

coldtea 12y ago
It might back-fire for a few individuals at the company (e.g they might senf off a CEO or some department head with his golden parachute), but the company will continue doing it after the outcry stops...
kolbe 12y ago
All bark and no bite. Citizens of the US haven't stood up to any immoral corporate practice and had a significant impact in decades. For example, the makers of OxyContin could (completely hypothetically) manufacture an opiate so powerful it rivals heroin, encourage doctors to prescribe it at many times the necessary rate for true medical pain-relief, watch millions of lives get ruined by addiction to their supposedly safe drug, and no group of people will ever get together in protest to put more than a couple percent dent in their profits.

nikcub 12y ago

Economic term is regulatory capture: https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture relevant Onion from this week: http://www.theonion.com/articles/elderly-lobbyist-always-droning-on-about-how-littl,36793/ http://www.theonion.com/articles/elderly-lobbyist-always-dro...

baddox 12y ago
Regulatory capture is one of the results. The primary economic mechanic that causes this is special interests vs. dispersed interests: https://en.wikipedia.org/wiki/Public_choice#Special_interests https://en.wikipedia.org/wiki/Public_choice#Special_interest...

1stop 12y ago

What do intuit lobby for? Do they have some sort of monopoly? Note: (I'm Outside US)

kyro 12y ago
> "In the most technologically advanced countries, filing a tax return is free, easy and fast: Instead of taxpayers painstakingly calculating figures themselves, the government provides estimates of what they owe based on the very bank records and wages it already collects. Intuit, maker of the popular tax preparation software, TurboTax, has funnelled millions to oppose every effort to make tax day less painful." http://techcrunch.com/2013/03/27/turbotax-maker-funnels-millions-to-lobby-against-easier-tax-returns/ http://techcrunch.com/2013/03/27/turbotax-maker-funnels-mill...
- judk 12y ago
  That makes no sense. Reporting income is is easy. The IRS will mail you a correction of you make an error. Deductions are the hard part, which is not govt tracked.
  - Crito 12y ago
    It's easy, but it is not as easy as it should be. They should be able to send me forms pre-filled for all of my sources of income (In my case, and in most cases, they already know all of that information. Some may still need to do some data entry.) What takes me a few hours could take me a few short minutes.
    - yid 12y ago
      Government doesn't move at Silicon Valley's pace. The ability to cheaply track your income from all sources and bill you directly for your taxes is barely a few decades old.
      - lemming 12y ago
        Plenty of governments in other parts of the world already do this. In Spain (and I assume in most parts of Europe), the govt provides a draft of your return, which most people just accept through their internet bank.

rayiner 12y ago

> $10mm/year in lobbying can virtually guarantee that legislation remains in their favor, which blows any kind of product R&D in terms of ROI out of the water. This is oft-repeated, but doesn't stand up to any sort of logical scrutiny. You think there aren't dozens of parties with interests adverse to Intuit who could pony up $10 million to lobby for the opposite position? I think of this every time someone mentions lobbying by telecom or media companies: for what Facebook paid for WhatsApp, it could purchase all of the lobbying efforts of the top 10 D.C. lobbying firms for the next half-century. You think the Facebooks and Googles of the world are above buying legislation in business-critical areas like telecom policy or copyright if it were that cheap? What lobbying does is help you tap into a base of support that already exists. In the case of Intuit, their lobbying dollars go to supporting Republicans and Libertarians who don't want to make filing taxes easy. The cost and burden of filing taxes is a major hammer people use to chip away at the whole concept of progressive taxation. It's a major selling point of proposals like the flat tax or consumption taxes. In a system with employer withholding, it's the only major reminder of how much the government is taking out of your paycheck each year. That $10 million doesn't guarantee Intuit favorable legislation--it leverages a deep divide in the polity that happens to advance Intuit's specific interests. And at the end of the day, almost all effective lobbying, at least at the federal level, takes that shape.

Crito 12y ago
The $10mm/year is the meager carrot. There is an implied stick, which comes in the form of much stronger support for opposing candidates come the next election cycle. $10 million is nothing; any lobbying group worth a shit can cough up that. You could probably fucking crowdfund it if you found a cause that 'the internet' cared enough about. But to make a difference you also need to convince your congressperson that you also have a stick and are able/willing to use it. Good luck crowdfunding that. A company like facebook has the money to have a stick, but these sort of tech companies are typically politically inactive enough to raise doubt that they would have the motivation ever use their stick.
- anigbrowl 12y ago
  I don't know why you're being downvoted - that's a pretty astute summary of the public choice theory problem. It's very hard to build an effective coalition for pragmatic pedestrian issues like making it easier to file taxes. Several presidential candidates have made it a plank in their platform but it's hard to get much traction for something people only think about once a year unless you also have a comfortable legislative majority.