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Scale Ruins Everything

(coldwaters.substack.com)
175 points drc500free | 7 comments | 14 Oct 24 17:34 UTC | HN request time: 1.272s | source | bottom
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efitz ◴[15 Oct 24 13:38 UTC] No.41848475[source]▶
It’s not that scale ruins everything, it’s the pursuit of scale that ruins everything.

I have thought a lot about antitrust recently and realized that it’s an overlapping problem with the VC unicorn problem. People get so hung up with being bigger/biggest, faster/fastest, that they minimize or ignore pathological side effects.

What if we have a progressive tax structure on business based on scale? Partly on size, partly on market power?

For example, what if corporate income tax were tied to the logarithm of the number of employees+contractors? What if the corporate income tax increased with the market share in markets served?

These kind of ideas have very low impact at small scales, but after a certain scale they start to have such a huge effect on bottom line that they disincentive growth for its own sake.

And they’re self-regulating and largely objective, unlike our current antitrust laws in the US.

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Dalewyn ◴[15 Oct 24 13:52 UTC] No.41848614[source]▶
>For example, what if corporate income tax were tied to the logarithm of the number of employees+contractors?

Unemployment would increase.

>What if the corporate income tax increased with the market share in markets served?

More companies would register in Panama or some other tax haven.

I would be wary of the Law of Unintended Consequences.

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1. azemetre ◴[15 Oct 24 13:57 UTC] No.41848654[source]▶
You're making it sound as if registering in Panama is some "gotcha" that can't also be easily closed via legislation.
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2. medvezhenok ◴[15 Oct 24 14:16 UTC] No.41848862[source]▶
Indeed. Change from corporate tax to VAT, and then no such trickery is possible (tax charged at point of sale)
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3. robertlagrant ◴[15 Oct 24 16:05 UTC] No.41850003[source]▶
VAT is a much better tax. Tax the flow of money, not the intermediate holding of money by a company.
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4. Dalewyn ◴[15 Oct 24 23:55 UTC] No.41854287[source]▶
Most of the US already has sales tax (it varies by State, county, and city; some have no sales tax).
5. psd1 ◴[17 Oct 24 06:04 UTC] No.41866843{3}[source]▶
VAT is regressive. Poor people spend a higher fraction of their income on vat-applicable goods. I'm against it on that basis.
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6. robertlagrant ◴[17 Oct 24 08:15 UTC] No.41867478{4}[source]▶
Not all goods are VAT-qualified for that reason. We have that safety valve already.
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7. psd1 ◴[18 Oct 24 10:22 UTC] No.41877955{5}[source]▶
That sounds a bit like "VAT can't be too bad because we can just not apply it", which I don't find convincing.

I agree that it's an easy tax to collect, and I think that's very important.

I fundamentally disagree with the grandparent that holds that we should tax flow rather than holding. That's a handbrake on activity. But I suspect we won't reach agreement as it's a question of personal values. If you think that billionaires are great and we need more of them, then I can see how you'd be in favour of vat.