Wealth inequality?

Ever meet anyone greedier then a criminal? Ever meet a rich criminal?

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What stops others from making and selling iPhones in the US without IP protections? Would jobs have invested all that money in movies if the first person who had a copy has the same rights to sell it as the company that bankrolled it?

 

Objectively false, as proved by the productive success of the Mondragon cooperative, among many others. Almost any large company could function quite well without a CEO.

I didn't say the CEO had no effect on the company's success -- I was working for IBM when John Akers turned the company's back on the PC market -- I said that CEOs' exorbitant, obscene pay is almost entirely unrelated to their actual contributions to that success -- and I have posted links to peer-reviewed research demonstrating that to be objective fact.

Sometimes he is, sometimes he is just warming a chair while others do the work, or while the Fed kites the stock market for him.

If you understand why IP is wrongful, why don't you understand why paying landowners for what our taxes already paid for and paying CEOs for how much the Fed kites the stock market are wrongful?

 

The greed of the criminal is to the greed of the rent seeker as the brightness of the moon is to the brightness of the sun.

Yes -- in fact, I have worked for at least one guy like these:

http://www.vancouversun.com/business/Telemarketing+fraud+conviction+nets+Ironside/828504/story.html

The IP monopolies on the iPhone. Duh.

Jobs wouldn't have had all that money. People who had earned it would, and they'd have invested it in production rather than IP rent seeking.

 

Still, greed unchecked (unregulated capitalism) is a massive problem within any given society.

 

Who produced it? The guy who invented the product or the guy he hired to make it? Make what without the R&D investment?

 

Please, stop making excuses for 'greed'.

 

Yes. But it is a point that you do not comprehend.

In order to USE it. They just wouldn't buy land in order to be parasites and pocket other people's taxes. THAT is the point.

Certainly removing the welfare subsidy to landowning would destroy the value of being able to pocket that subsidy. THAT'S THE POINT.

No, it is not. Slums are created when the welfare subsidy to landowning makes investment in improvements uneconomic. It's very simple: if you can buy a couple of slum apartment buildings for $5M and get net land rent income (including the eventual capital gain from land appreciation) of $500K, or build a new apartment building in the same area for $5M and get net land and improvement income (including the inevitable depreciation of the improvements) of $400K, you are not going to build the new apartment building.

I will continue to identify the facts that you would prefer no one know.

 

Neither. The ones who initiated the process and paid both of them for their labor produced it.

Again, you are claiming that there is no R&D in the fashion industry, because there is no IP. But as you know, that claim is objectively false. Why do you always have to repeat claims that you know have already been proved objectively false?

 

Yes, actually, you have. Any business owner who owns land and pays property tax on its value is not passing on the cost of the land value portion of his property tax, because he CANNOT. That is a fact of economics that has been known for 200 years, and is not seriously disputed by ANY competent economist. It is merely a fact that is not known to YOU, because you do not know any economics.

Land, mineral rights, broadcast spectrum allocations, etc.

Nope. Google "tax incidence" and make at least some minimal effort to inform yourself.

Not being able to pass on a tax does not mean you can't make a profit. Consider the cost of something else in fixed supply that companies sometimes buy: paintings by dead artists. If a company pays $100M for such a painting, can it pass the cost on to its customers? Or does it just have to figure out a way to make a profit despite having spent the $100M on something that doesn't help it make profits?

The landowner qua landowner does not provide any product or service. He is a pure parasite.

If your "business" is pocketing other people's taxes, good riddance.

No, it is not, because someone more capable now has the land, is paying the tax on it, and is using it for production of wealth, for which purpose he is employing more people than you did.

Good. That is one reason we would like to remove the profit from idle landowning.

 

They would have all the protections anyone else has.

To be first in the market, and to understand things about the product that the copier doesn't understand and therefore can't copy.

It would remove the unjust privilege of rent seekers. True.

 

You are correct.

My issue with land value taxes is this. Two things.

First, I have seen no example anywhere in which a federal level land value tax, has ever replaced any other tax. Same is true of VAT or national sales tax. When you look at Europe, they have hundreds of taxes that we would never think off, and yet they never replace anything. In the UK they have a TV tax. For every single TV in your home, you have to pay a tax on it. But that tax doesn't replace anything. It's just an additional tax. They also have a VAT tax, and a capital gains tax, and a land tax (stamp duty), and still have an individual income tax that is far higher than ours.

Nothing is ever replaced. It just ends up being an additional tax. If we passed a bill to eliminate capital gains and income tax, and replaced it with a land value tax, that would last barely a year. Then they'd bring back all the taxes, and yet not repeal the land value tax.

Second, you are correct that property taxes are not the primary cost of land. The cost of the land itself is the primary cost. Generally because property taxes are so low.

FYI....
I know for a fact that property taxes are passed on to renters. I've worked with apartment owners and I know they pass on rental increases when property taxes go up. In fact I know of one person who owned a dozen or more rentals, and his personal policy was to increase rents every single year, with or without property taxes going up, that way when taxes do go up, the renters don't freak out from the rental hike. (distribute the increase over multiple years. $5 increase over four years, or $20 in one year).

But back to your point that property taxes are not the primary mover. That is true, because property taxes currently are not economically significant enough to cause distortions.

However, go read the proposal by Roy. He is openly saying, and it would be necessary for land value tax to become economically significant, in order to replace income taxes.

Think about my specific situation. I live in a condo. Thus there are roughly 200 units, on one single plot of land. Each unit having on average two working adults both paying taxes. That's 400 tax payers. Some are realtors, my neighbor is an engineer, some are doctors, others retired school teachers, ones a nurse.... and so on. The combined income tax paid by all these people is likely in the million dollar range. Possibly even higher given I know several of them operating businesses out of their condos, and they are likely paying taxes on that. And all that tax is coming from a single plot of land.

In order to have a land value tax gain enough revenue to compensate for the loss of the income tax, the land value tax on my condo's land, would have to be in the million dollar range. Then divided up by the 200 units. That would be $5,000 per unit.

I couldn't afford that. I'm gone. The retire teacher would be gone I bet. That would GREAT for the doctors and engineer. But it would wipe out many of us at the low end.

There would be some massive economic effects from this idea. And like I said before, I know that it would only last a year or two before suddenly they would reinstate the income tax and capital gains, and yet the land value tax would stay.

Another quick example, that I have never heard a response too.

Take a factory with old buildings that are no longer used. Land Value Tax, ignores the value of the property. The problem is, the property can sometimes destroy the value of the land. Those buildings would cost a fortune to demolish, and remove. Yet no one wants the buildings.

Now according to land value, the land near the city, with access to rail lines and so on, would be worth hundreds of thousands in tax. But with the unwanted unneeded buildings on them, no one will buy the land.

Property tax would decline with the property value decline. Land Value (in theory) would not. So the result is slums. Empty abandoned buildings. No one is going to buy a property that costs a hundred thousand in tax, but has buildings they cant use on them. It would be cheaper to buy an empty lot, outside the town, that is a fraction of the tax, and no expensive demolition required.

What's the answer to that?

 

And if they can raise prices or cut wages they wouldn't do that anyway?

 

Probably nine times out of ten wealth inequality is the result of work inequality. People that work, are the kind of people that work very hard and sometime at more than one job.

Lazy assed drones that whine about people that have money do so from their couch with welfare stubs and food stamps in their wallet.

 

Right those additional pennies can had through reduced cost of production. But that free-market motivation is going to exist anyway. Are you going to just assume that every single time there is a tax hike, that every business in the entire country is going to magically find an equal cost cutting efficiency measure? That's a bad assumption. Especially since, the capitalist system already has a massive incentive to find cost cutting measures inherently.

Even if one did happen to find a cost saving measure after a tax hike, the result would simply be that a savings that would be passed on to consumers before, would be passed to government instead of consumers. This is the same difference as passing the cost savings on to consumers before the tax hike, and then raising the price to pay for higher taxes afterwards.

In either case, the taxes are passed on to consumers. Either in raising prices, or not in lowering them from a new found cost cutting method.

If you were right, and everything can simply magically be made to cost less, then all companies on the face of the planet would already be doing such moves. If I build cars, and I can just magically use less material, and less energy in my plants, wouldn't I already use that magic? Especially when the auto industry is so competitive already, someone would use that magic, and I would be forced to use the same magic too.

Eventually you can't cut costs and still make a competitive automobile. Same is true in every company in the world.

When everyone runs out of magic, and government increases your costs, you have to do something other than 'cost cutting magic'. You have to either pay your employees less, or charge your customers more.

 

Not unless they have to. Raising prices drives away consumers. Cutting wages, will often result in unhappy unproductive employees, or a high turn over rate, which results in the same.

Back when the airline industry was regulated by the government, the result was that airline pilots made tons and tons of money. Did the airlines have to pay pilots tons of money? Nope. But they could, because the government regulations drove up ticket prices so that they were able to afford paying employees tons of money.

In fact everyone at the airlines made tons of money (relative to their jobs) because of super high ticket prices. The average flight attendant, under the high ticket prices, was earning $30,000 a year. After deregulation, and ticket prices started falling from competition, flight attendants were being paid $15,000. Again, those numbers seem really small until you remember this was the early 80s. $15,000 in the early 80s, is about $40,000 today. $30,000 for a flight attendant, is up near $80,000 today.

Why? Why pay so much for such an entry level job? Because most companies are willing to pay good employees more money. They always have been in the past, and certainly do the same today.

But if you drive up the costs of doing business, then yes the company will be forced to either pay lower wages or charge higher prices.

 

One thing I do know, is that you are jerk more and more. If you can't talk to people without being a jerk, then we'll all eventually ignore you, and you can talk to no one. Either grow up, or shut up. I don't want to talk to mouthy high school students, that didn't have parents decent enough to teach them out to interact with people.

Moreover, you are wrong. I have talked face to face, with land owners. They most certainly do pass on their costs to whomever they rent to. I'm sorry. All the economics in the world, doesn't change the facts that I have met people who own land, and pass on taxes to their tenants. Nothing you say changes this. I'm sorry! You can't say that X isn't happening, when I know people who actually do X.

I want a specific example of a specific company or corporation that you can cite, and prove that they have not invested in growing the business, investing in new business, but instead have invested only in "rent seeking".

And no, merely investing in land, is not rent seeking, nor is mineral right, or spectrum allocations. Could be.... but if you are a mineral company, then buying mineral rights is investment into growth for the company and the economy. If you are construction firm, buying land is investing in future buildings that benefit society. If you are a Cell Phone company, buying spectrum allows more Cell Phones that benefit society, and grow the company.

Rent seeking, is not "growing the economy and making the country more wealthy". If that is what you think it is, then you don't know what rent seeking means.

No, I'll just ignore forum idiots that act like jerks constantly. How about that? Then you cease to exist, and no one cares what insulting crap you post anymore. You can talk to a wall for all I care. Grow up... or shut up. Didn't you have parents? Or did they ignore you as well, and now you are trying to replicate that here? Because I'll be more than happy to continue the pattern of your life. Just keep being a jerk.

Huge difference between investing out of profits, and making a profit.

Really? So the owner of the strip mall, that provides buildings and parking, and lease space for other people to open up stores, and restaurants.... is providing nothing? So the owner of an apartment complex, that provides hundreds of units for people to live in, is providing nothing of value? The people that run their business in the mall, and the people who live in the apartments, sure seem to disagree with you.



Let me tell you want you are looking at here. These are formerly apartment buildings in South Bronx. In the 1940s the government in New York passed rent control on these "pure parasites" of yours. Because of that, the parasites abandoned the buildings. Without maintenance, upkeep, and investment from the parasites, the buildings are completely ruined, and unusable. Even if the rent controls were completely eliminated today, it is unlikely that any of these buildings are even salvageable.

Economists have determined that between 1972 and 1982, nearly 30,000 living units were abandoned and lost, each year.



What you are looking at here, is also in South Bronx, but these apartments are not covered by Rent Control, and thus they still have landlord parasites, who have invested in upkeep and maintenance, and cleaning the area around them. The parking lot is painted and sealed. And there are dozens of people living in these units.

So.... in "your world", the previous photo shows us the benefits of getting rid of the land owning parasites, and this photo shows us the destruction of keeping those land owners. What part of this am I missing?

Haiti verses Dominican Republic. Haiti has limited land ownership, and everyone is impoverished. D.R. has strict land ownership, and they are far better off.

Well I'm against taxes, and against government handing out tax money. Preaching to the choir.

Very very very few people actually have idle landowning.

People sometimes cite companies that purchase mineral rights, but don't produce anything. But that ignores the fact that one might be getting investors, or building up capital to start the production process. Another problem is the insane regulation and litigation by eco-groups to hold up the process. And lastly, many times you don't know what minerals are really there until you start looking, and who knows how long it will take to actually find enough of anything to make it economically productive, and sometimes you find out it simply isn't economically productive.

Lastly, sometimes there is a significant amount of something there, but you don't yet have the technology to get it. Why should you be forced to sell the land, if you know there is something there, and you know you will get it someday, but don't have the tech to do it right then?

On the other hand, I know a guy who in his 40s, bought a plot of ground in the country. When he reached 60, he built a house on it, and retired.

How is that a parasite to anyone? Who is being harmed by that? And who are you to say so? Nah, you are wrong.

 

Competition is also hit with the tax. Unless they can move it overseas to get away from it. (Like the Internet Sales tax if they pass it)

 

Roy, perhaps you can answer my questions in post #60, here: http://www.politicalforum.com/showthread.php?t=326900&p=1063189366#post1063189366

 

There is a distinction between "copy protection" and "Intellectual Property protection".

Thought.... shouldn't be something that can be patented. If I come up with that idea of "a store that sells only pants", how is that intellectual property, that can be patented? Now this seems insane now, because we have stores for everything. But an intellectual property, is the idea that a "thought" can be patented.

The whole concept is dubious at the start, because how do you know out of 310 Million people, that not one of them came up with that thought first? And then you have the millions on million who are have died. How do you none of them came up with that thought first?

Then you end up with companies that are simply lawsuit factories. They go around with money, and patent everything they can, then go looking to try and find someone somewhere that violated their patent.

If you really really start looking into the vast majority of patent lawsuits, the whole thing is absurd.

But I'm completely in favor of Copy Protection. You can't just take a Chevy, slap AndeMobile, on it and sell it. That's a violation of copy protection. Nor can I download someone's PDF story, Copy and Paste it into my file, and publish it as my own story. That's a violation of copy protections.

But I have no problem with Samsung building a similar device to an Iphone.

Would Steve Jobs have invested all that money into making the Iphone? Well.... would Intel have invested all that money into making Micro Processors, if they knew that AMD would copy it? Yes. Because they do, and AMD does.

Take Linux and variations for example. No IP at all, and yet many companies have invested heavily into R&D on Linux.

So I would suggest that it would still happen. I would say that in all likelihood, that investment in R&D would possibly decline, and or would possibly be more geared towards making the product more difficult to duplicate. But it would still happen.

The problem I have is that IP is mostly used for stupid trivial stuff. For example, Apple sued Android over IP, and one of the things Apple patented, was how to unlock the screen.... which involved swiping your finger from left to right, along a line. Android was forced to change how to unlock the screen. Millions of dollars spent on lawyers, to change that one aspect. Really? That's what our system is designed to protect? Swiping a finger along a line?

Another example was R-12 verses R-134a refrigerant in cars. I've seen no evidence whatsoever that R-12 was really damaging anything. What I have seen, is tons of evidence of (because I worked for Cadillac), is that the patent for R-12 had run out and dozens of companies were begining to make it. By banning it, Dupont was able to once again corner the market with patented R-134a, which ironically is less efficient than R-12 in cooling, and at the same time, because it's a smaller physical molecule, has a much higher potential to leak, and thus insure higher sales of refrigerant than R-12 had. There are 1960s cars rolling around with the original R-12 in it from the manufacturer. Additionally R-134a requires a different type of lubricant than R-12, which is less able to keep the seals good.... which again insures more leaks, AND results in higher A/C compressor failure, thus insuring more replace A/C compressor sales.

DuPont pushed to ban R-12 strictly for IP purposes, and consumers have been paying a heavy price for it for decades now.

Another example is in pharmaceuticals. Some medications when the companies patent runs out, they flip one atom around, that does nothing, and re-patent it as a new drug, which technically it is. But the drug is exactly like the previous, same benefit, same side effects, no difference. But they market it as being better, without justification, because they have a patent on it.

Hundreds of thousands spent on marketing, and on lawyers, and on patenting, to produce the same thing that already exists.

This system as got to change. It must.

 

I agree that magic is not limitless; it's pretty much a universal that if you take anything too far, the game changes. But as for cost savings, there's nothing like looking, if you want to find something, and new expenses get one to look. I think we agree that in the sort run, marginal increases can be managed, and in the long run, big cumulative increases are going to start hitting bone.

 

Part of the deal with the airlines was deunionization, as well as deregulation, wasn't it? In the cash-rich regulated era, I don't think the employees would have participated in the good times to nearly the same degree, without unions in place to provide bargaining power. Nor do I think that consumers are first in line to benefit from cost improvement, unless the market situation dictates that. Basically, I see what you're saying, but I think you paint the picture a bit too pretty, in terms of firms being as good as they can to workers and consumers. I think it's more 'as good as they need to be,' depending on relative market power and stuff.

 

Your example isn't an IP problem. Patents have tests, novelty and inventive leap would disqualify your ideas what about the billions spent on R&D do you think that will continue without patent protection? Why wouldn't pharma just switch to generics? Would you write a song that can be sold by everyone else?

In your drug example generic manufacturers could make the drug that expired.

That swipe is a novel idea. Should be patented.

 

Yes, new expenses get one to look. So does natural competition in the market. If you are losing market share to a competitor, you are already looking for ways to cut cost.

If we were talking about a protected industry, like the airlines prior to deregulation in the 1980s, then you are not looking for a way to cut costs. Because you are protected by the government. In that case maybe some tax hikes might make them look when before they were not.

But if you are not in a protected industry, I promise you, you are looking for ways to cut costs already. Competition forces you to look for cost cutting methods.

Taxes are not going to give you any more incentive to cut costs, than competition already provides.

But here's the difference. Taxes hit all companies the same. So you actually have less incentive to cut costs because of taxes, because when you raise your prices due to taxes, all your competitors are raising prices too. When you cut your wages because of taxes, all your competitors are cutting wages too.

 

But my example is a real life, actually happening, example. So apparently it *IS* an IP problem.

Again, a song is under copy right protection. But you can't (or shouldn't) be able to patent the "idea" of writing words to a tune. Now no one in the world can write songs, because I patented the idea of writing songs.

Horrible idea.

And yes, I do think that companies would still spend billions to come up with new drugs. Again, would Intel spend billions to develop new CPUs, if AMD would copy them? Yes, because they do, and AMD does. So yes they would.

 

Well, of course there are trade offs. But as a whole the trade offs were clearly for the better. Back in the regulated days most planes flew mostly empty. The lowering of ticket prices allowed for millions more people to fly. But yes, of course consumers were the first to benefit. Lower prices allowed far more people to travel. Granted the 5 course meals provided on long flights, are all gone. So are the large seats with room to stretch out.

There really wasn't much de-unionization. Not early on. Now later, the unionized companies were of course at a competitive disadvantage to the non-union companies. Which is why the Union airlines have been declining to the non-union airlines.