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Patents are property and we need taxes/fee on it. $500/year per patent, will ensure use it (if you think it is valuable) or lose it. This is no different from domain names, most people pay $10 - $100/year just to keep a domain name. Some domain names are used, most aren't. These taxes can fund free education or healthcare or defense.


> $500/year per patent, will ensure use it (if you think it is valuable) or lose it.

Not really.

Some patents are fantastically valuable to patent trolls. Some are not. A $500/year fee isn't going to deter a "company" of lawyers who are making millions soaking businesses with patents that should never have been granted.

If you want a scheme that actually does what you want, you'd need something like:

The owner of the patent chooses the fee that they pay per year. And anyone can pay that fee * the remaining years on the patent * some multiplier (probably in the 2-10 range) to prematurely end the patent.

So, if someone's got a patent on a hamster powered submarine, they can keep it for $1 per year (or whatever the minimum should be). And that's fine... because it isn't harming any one since no one wants to build such a thing.

But a patent that a troll is using to milk the industry with will need to have a pretty stiff fee or people won't play ball, they'll just buy out the troll.


> The owner of the patent chooses the fee that they pay per year. And anyone can pay that fee * the remaining years on the patent * some multiplier (probably in the 2-10 range) to prematurely end the patent.

So basically ending patents? If you invent something fantastic, say a way for a self driving car to perfectly sense its surroundings, Ford could just come in and pay whatever amount to invalidate your patent and prevent you from bringing your invention to market?


> If you invent something fantastic, say a way for a self driving car to perfectly sense its surroundings

That sounds like a highly constructed example, and even if we take it for bare value, makes a lot of assumptions, for example that whatever you invent is patentable.

The way you phrase it also makes it sound like patents are all about individual contributions, when in reality the era of lone genius inventors is long over (if they ever existed). In the US, it's practice for your funding institution to keep all the rights to your inventions, so if you invented the perfect sense for self driving, it's highly likely that a company like Ford already has the patent, because they quite literally own your intellectual output.

Imo, I feel the same way like OP, there needs to be a use it or loose it doctrine, just like there is with trademarks. Overall the legislation around intellectual property and copyright feels to be in favor of big corps at the moment and should be heavily castrated.


Doesnt sounds constructed to me.

The "you" in that case could very easily be a startup


The number of patents owned by startups is greatly dwarfed by the number owned by large companies. Furthermore, the competition opportunity for small businesses to offer similar products at lower prices greatly outweighs the value of patent invention.

Some people would say large businesses can make things cheap in a way that small businesses can't compete with. However, that turned out to not happen in practice as big companies chase huge profit margins, supported only by the government.

China doesn't have this problem the US does because they have weaker patent laws. Patents need to be eradicated ASAP or we will not be globally competitive. We are also harming humanity as a whole as the inventive utility of patents simply doesn't scale in proportion to the harms, with the large populations we have now, they are clearly harmful on balance.

The fundamental problem with patents is that the benefit has lower asymptotic complexity with respect to population size than than the harm does. When you exceed some population size, patents become harmful.

The utility of copying is N^2 since you have O(N) copiers and O(N) inventions to copy from.

The harm of patents is therefore O(N^2) since this is the copying that patents prevent.

What we find is that the benefits of patents seem to scale at most around some O(N /log N) ish metric. Doubling the population size increases the number of inventors, but the chance an invention was already invented by someone else increases as population size increases. Hence the benefits of patents scale worse than O(N). Applying that to the harm and we still get O(N(N/logN)) for harm and O(N/logN) for benefits. Clearly patents do not scale.

* Here I am using Log N as a substituite for the difficulty increase of finding an invention not already invented. This exact measure is difficult to estimate.


Not having a patent doesn’t _prevent_ you from bringing your invention to market, it just accelerates _someone_ bringing it to market, and that’s a net good for society if the invention is useful, no?


Patents are vital to bringing things to market. It lessens the risk associated with investors getting returns, which allows funding for development.

I get that people don't like patents because they sometimes get abused, but on the whole I think we wouldn't have a lot of the things we take for granted if they didn't exist.


Let me add a personal anecdote: my uncle has developed a better sprinkler head. Think of bearded inventor tinkering in his garage for a decade. This was late 80s /early 90s so not much CAD was involved.

This is where the patent system shines. Because he got a patent he could shop around, sell it to a company which made a tidy profit on it. He didn't need to raise capital to establish a factory and all that to bring it to market and the company buying it seriously got ahead without spending an inordinate amount of money and time inventing the thing.


I agree that patents serve a purpose, but taxing intellectual property similarly to other property doesn't seem like it would end patents.

A slightly different approach would be for patent owners to declare an estimated value and pay property taxes on that value to enforce their monopoly. (They may also wish to update the estimated value periodically as circumstances change, perhaps every few months or years.)

To keep owners honest, anyone is allowed to pay the owner a multiple (1.5x? 2x? 10x?) of the patent's current estimated value to invalidate it.

If the patent owner wishes to hang onto the patent but cannot afford the taxes then perhaps banks would be willing to offer a patent equity line of credit, like using any other income-generating property as collateral.

To use your example, if you estimate that your self-driving patent is a ten million dollar asset and Ford pays you twenty million dollars to invalidate it that seems like you come out ahead because you have more than the patent was worth and can still build your product.


I don't think that the patent should be allowed to be ended early; the fee is paid to keep the patent protection in place.


> Some patents are fantastically valuable to patent trolls. Some are not. A $500/year fee

Part of the problem is having a huge number of BS patents driving up the cost of going through all of them to figure out what's what.

Its not the only problem with patents, but i think a "property tax" solution would solve some of the issues. I'd like it to be incrementing each year - like first year $0/year, and increasing each year so the longer you keep things out of the public domain the more you need to be able to self-jystify its value.


Maybe when you file the patent, you have to submit an anticipated value statement and you are taxed some % / year on that anticipated value. If somebody violates the patent, you can sue them for up to the amount you anticipated, but not more.

In the future you can amend the value claim, but you can only adjust it down.


So someone inventing something for say mobile phones in the 80s that is still used would have estimated their patentent to not be so useful because the number of mobile phones wasnt that high. And if Apple violated their patent they would just pay pennies because of that? It is extremly hard to estimate the worth of a tech 30 years into the future invented today. Take a tech invented today and tell me what the market value will be in 30 years and how sure you are about that predicition.


If you invented and patented something in the US in 1989, you'd have protections until 2009 at the latest. If it wasn't usable until 2013, then that sucks for you, but it is what it is. Your invention doesn't get 20 guaranteed years of profitability. You get 20 years to figure out how to make it profitable.

The two are very different concepts.

edit: this is why you don't patent every damned thing, just the things that you believe will be profitable over the next 20 years. Otherwise, the cost of researching and filing the patent, as well as maintaining it, may well exceed whatever profit you actually get from the thing.


> this is why you don't patent every damned thing, just the things that you believe will be profitable over the next 20 years

Unless you work for a corporation, that owns your intellectual output anyway, and encourages you to submit forms for anything that looks even remotely patentable.


I want to be clear here: you submit a form for everything, then people in the legal and business development teams decide if its actually worth patenting.

But even then, if you devise some thing that will be very useful if we ever get teleportation working, your employer may still not patent it, if they believe that teleportation is more than 20 years away.


Yeah, that’s roughly how it would work, except 30 years feels way too long.

If other people are better than you at seeing what some technology could be used for it, then maybe we should lower the barriers for those people. The whole point of the patent system should be to provide the greatest benefit to the greatest number of people.


That's awful for protecting innovation. You don't know the market value of each individual invention with that level of granularity.

Companies and researchers should be free to patent to protect themselves, but patent trolls with no clear technological development (no lab, no product, no licensing+developing) should be stopped.

It seems easy to me to draw a bounding box around these behaviors with a simple test. Perhaps like a Howey test [1], but for patent trolling.

[1] https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co.


>a scheme that actually does what you want

This seems like a pretty bad attempt at such a scheme.


>making millions soaking businesses with patents that should never have been granted.

Invalidity arguments and IPRs suddenly aren't things?


The troll can price their licenses slightly less than the presumed legal costs. Then most victims won't fight.

Presumption of validity is what makes patent trolling more lucrative than other forms of predatory litigation. You're guilty until proven innocent, because the law assumes that the patent office is generally doing the right thing.


> Presumption of validity

It's just an evidentiary presumption that is trivially rebutted with any evidence.


> Invalidity arguments and IPRs suddenly aren't things?

I'm sure that you're aware that when you go to court, the result is never certain. Bad ruling happen all the time.


The vast majority of these decisions are against the patent owners, which I'm sure you are aware of. Also, I wasn't the one who characterized something as a patent that "should never have been granted."


I offer as an alternative:

IP is property, and it's taxed at the value you declare that it's worth.

However, if you swear to the IRS that it's worth $500/yr, then you can't claim in court that a violation of it is costing you $10,000,000/yr in losses. That would be perjury.

Your patent is worth $10,000,000? Awesome! I bet your local school district will love to hear how much you'll be paying in taxes on it.


I offer one more alternative. Double the tax every year, and once the ip holder decides not to pay the tax, IP is released to public domain. No compnay has money to keep IP indefinitely in such a scheme.


I've proposed this alternative on message forums like this for probably 20 years now, but specifically for copyright. I think it'd be a great way to let Disney and co. have the long copyright terms they want for extremely valuable properties, but get other stuff into the public domain much, much faster.

Instead of doubling every year, my proposal is 5-year terms: the first is free, then $1000 for the next 5, $10k for the next 5, $100k for the next 5, etc. Feel free to adjust the actual dollar amounts, but you get the idea. Most stuff would be in the public domain after 10 years, if not 5.


I would suggest only for corporations above a certain size. I would appreciate if some old music composer somewhere gets to continue being old and stuff without worrying about this sort of thing.


Music is coveredby copyright , an entirely different law


A lot of patent trolls are very small companies though


It would have to be managed by tracking the number of active patents. You get 100 active patents tax free. Over that, and you have to pay an annual fee. This allows for independent inventors to operate as the system intended while clamping down on NPEs.


Music compositions get covered by copyright. Patents are another section of law.


What do you think will happen if IP becomes impossible to afford, as it surely will under such a policy? Do you think companies that value IP will bother investing further in R&D, let alone even stay in your country?

Congratulations on the massive net loss in taxable income in your country.

EDIT: Removed some mean words.


It'll only be impossible to hold for long periods of time. We can start the tax at $1, it hits $1mil after 20 years - and for 99.9999% of IP by year 20 it's either clearly worth zero or clearly worth >$1mil so it'll be an easy choice. It'll force things into the public domain faster and make it expensive to hold a big bullshit patent catalog, but for actively used properties it'll be fine.

Companies are going to want to sell in one of the richest markets in the world; they can either pay for IP protection or not be granted it.

edit: I'm not suggesting these exact $ values as clearly being the correct ones, it's just an example.


You do not seem to understand how patents work because of other comments thinking that you can patent something without publicly disclosing the invention. In and of itself, this comment is silly because the answer to your question "What do you think will happen if IP becomes impossible to afford, as it surely will under such a policy?" is "exactly what happens when patents expire currently." It appears you are unaware that companies still invest in R&D knowing they at most get a few decades of exclusive rights.


in the software ip case, they can invest in building competitive products in an open market. If your software IP is a secret then don’t publish!


So, for example, the secret sauce that makes the CPLEX and Gurobi solvers tens or hundreds of times faster than open source equivalents should simply be released to the public, leading to the immediate loss of 90% of those products' competitive advantage?

You don't see how such a policy would spur terror among large, profitable companies with trade secrets, leading to them moving overseas?


If it's secret sauce, it's not a patent.


In these threads it always end up being: "Sure Foo would be nice, but, I don't know if you are aware, we are actually held at gunpoint by the status quo; its all really a non starter when you consider this fact."

If this is the only real problem, than why not just let them go overseas? Let the market play it out? The boon of progress and freedom X country would get from becoming even little more rational about IP would pay for itself and be better for actual people.


> The boon of progress and freedom X country would get from becoming even little more rational about IP would pay for itself and be better for actual people.

That's what China has been doing for decades, and "gongkai" [1] is just one tiny part of it. While life for the average Chinese citizen has gone up - the CCP managed to lift hundreds of millions of people out of poverty - the life of most Western populations has gone down the drain as entire industries, entire towns were unable to cope with unfair competition.

The societal consequences of that will haunt us all for many years to come.

[1] https://www.bunniestudios.com/blog/?p=4297


I don’t think you understand how patents are used. It’s not secret sauce if it’s patented.


Something like this genuinely does hurt very small businesses or inventors who invent something actually valuable but don't have time to quickly scale up.

What I like for IP laws is as follows:

When you create a protected work, you pay a very small fee. Say, $1 for copyright, maybe $500 for a patent.

Each year thereafter, if you wish to maintain your IP protection, you must pay double what was paid the previous year. Otherwise the property reverts to the public domain.

This ensures a period of protection if it's genuinely needed, but ensures that everything will eventually enter the public domain, especially in the case where no one is making any economic use of the material.


Patent protection already is not indefinite. It seems much simpler and more fair to shorten the protection period.


Even if we halve the patent protection period, that is still ten years during which a patent troll can scoop up a BS patent and then simply send threat letters and rake in money, while chilling any actual advancement.

Currently, there's an incentive to disallow progress. If someone does not want to make use of their own patent, they are currently incentivized to sit on it and keep the ability to create that thing out of the hands of anyone else, "just in case". If we shorten the period as you suggest, to half (for example), then that freezes that progress for a decade.

If an incentive is created to put inventions into the public domain if one is not using them, then that is better for everyone.

And by doubling the fee each year, it becomes financially infeasible for even large companies to keep things out of the public domain forever. A fee of $500 that doubles annually would, at the 20 year mark that is the current patent lifespan, cost a half a billion dollars to renew for that year.


Something I've wondered about - you specify a value and pay a tax accordingly. Anyone is then able to buy it from you for that price. Have some short term part for free, then fees scale over time.


A slightly different version was in use in Denmark:

a ship declared the value of their cargo for toll purposes. They decided the price, but the catch was the customs could buy the cargo at that price.


That is fiendishly clever.


It sounds nice in principal but I think it’s not so easy in practice, if I asked you what’s your car worth you probably say something along the lines of well it would cost x to replace it, or I paid y for it, or I could sell it for z on eBay (all three different prices) but if you then said that well whatever price you say someone can buy your car for and you’re stuck with without a car while you go figure out replacing is actually a price is not any of those prices, and is probably higher than the actual value, and may even be higher than the cost to replace it - you might say that’s the idea but ultimately it feels creepy to make people pay a tax to avoid the risk of an asset they rely on not to be taken away at an inconvenient time…


The value to me would be the replacement plus hassle value.

There's clearly values I'd easily accept, you offer me a hundred grand for my car and you can take it whenever you want.

Now for regular items like a car this would be hard. How do I value it and how do I not get caught out when second hand sales spike and I don't follow the markets?

But we're not talking about everyone's car. We're talking about asking the state to forbid others to make or build certain things (yes I know it's more detailed but you get the meaning).


Yep but that’s kind of my point - let’s say your a poverty level worker with a POS car “worth” $2k but it’s reliable and you need it to go to work, and finding another one for a solar price carries the risk of finding a lemon or having unexpected bills your going to end up saying it’s worth $[4]k because it would be a really bad day for you not to have your car and taking the risk on a replacement is just not worth it. You end up paying a higher tax rate than the guy that’s got three cars in his garage and his happy wearing the risk over time of being slightly under replacement value since it lowers his effective tax rate and if he’s out a car for a bit at slight loss that’s no big deal..

That extra “value” (or tax on people) you ascribe to your car may or may not be distributed in manner that societally makes sense


alternative: anyone is able to make it public domain for that price


This creates a clear and obvious arbitrage opportunity that finance people on Wall Street will exploit almost instantly.


Ok? It results in them paying taxes while they hold it, to the value they ascribe to it. If they say it's higher than the original buyer, we get more in tax revenue

Or have I misunderstood your point?


You’ve misunderstood my point. This is formulaic finance math. In normal finance markets, there is a natural equilibrium where markets fully value the risk of mis-pricing the asset as part of the asset value. In the scenario outlined, only one party in the market is taking that risk, which means any financially savvy third-party can basically make free money off assets owned by others almost risk-free under a wide range of scenarios. Instant profit while producing no value. It would create an entire parasitic finance industry dedicated to exploiting it. You won’t generate much tax revenue if you destroy elementary mechanics of the economy along the way.

It may not be intuitive how the math works but this would be exploited so hard it would cause serious social and political issues. I don’t have a dog in this fight, I am just savvy enough to the math to see how bad an idea this is. Which is probably why no government has seriously attempted it even though it is an old idea.


Could you outline a single example or at least provide a reference to understand this more? I'm not at all getting what exactly these third parties would do. How is it different from just putting up items for sale with a price?


That would effectively kill software patents. Which is a fine outcome.


This is better than what I proposed.


Doesn’t work.

Lots of people don’t know what their IP is worth, and it can change with market and tech trends.

And the damages aren’t based on the harm to the IP owner, but on the benefit to the infringer.

I could have a patent that I think is worthless, but in 10 years I discover that a multinational flat out stole the IP after an NDA meeting. What is the value that I should have declared?


But property usually isn't taxed. Trading is. If you license a patent to someone else for $500/year, you'd pay tax on that $500. But if it's actually worth more, of course you wouldn't charge such a low fee.


Property is almost always taxed. In Texas, property taxes on homes are 2.5 - 3% of value, most people pay between 8K - 30K every year. And this keeps going up! Over a 30 year mortgage, I'm sure most people pay more on property taxes than on their home. Approximately 50% of property taxes go to school districts, the rest for other municipal services.

Some states also tax car as property.

What is not taxed is Intellectual Property. Because it is almost completely owned by the super rich. And, of course, these billionaires need all the help they can get. How about we change this? We can think of wiping out property taxes for homeowners (making homes affordable) and fund education from patent taxes. After all, the super rich are deriving these patents from the education system, its only fair they pay their fair share.


Real property is an exception but we're talking about other kinds of property. I don't know of any other kind that's commonly taxed.


To my knowledge, all US states have property tax.


That's the point up thread.

It isn't now, but we could make it so.


> Patents are property and we need taxes/fee on it. $500/year per patent

Those 'taxes' already exist (at least in the US system). They are called "maintenance fees".

See https://www.fr.com/insights/ip-law-essentials/everything-abo...

Failing to pay the fee causes the patent to expire, and be unable to be used to sue someone. So these troll firms must also be paying these fees to be able to sue based on the patent.


This is interesting. So Oracle holding around 52000 patents pays around 23.000.000 USD a year in maintenance?


Yes, having patents is expensive. Large corporations often file patents for defensive reasons, and for this they employ multiple patent lawyers full time.


Yeah, so add a couple of millions on top oof the 23.000.000 a year for lawyers and other staff.


I would be in favor of a fee that is 1024 * 2^n USD where n is the nth year you want to keep the patent.

1st year = 2000 USD

10th year = 1m USD per year

20th year = 1bn USD per year

It becomes prohibitively expensive if you don't use it. After 23 years it would make only sense for the most insane blockbuster drugs to keep going for another year.


Never used a fixed number for anything. Just tie it to a percentage of yearly revenue of the entity. This way you can ensure:

- small companies and private people can afford patents

- big corps do not get an advantage, in fact the bigger they get, the more expensive holding a patent becomes, ensuring they have to use those patents and not patent everything just because

- number of patents any single entity can hold is limited, unless they want to go in debt for holding patents

- there could still be a minimum yearly amount as proposed by you


That just means patent trolls would split their patent portfolios into hundreds of holding companies. Also people would start filing bigger and bigger patents, stuffing more and more claims into a single patent.


Well this is a problem we need to tackle anyways. Splitting things into a thousand holding companies should be with considerable cost as well for those involved with a thousand holding companies.

There is literally no case in which society profits from a corp being split up into a thousand holdings.


Tie it to the expected value of the IP? If you think your idea is worth $1 billion, pay $10 million (1%) every year.


How often are you allowed to change this? Could just undervalue it until you suddenly don't. If you are not allowed to change it that is not an uninteresting idea.


Domain names pay per year because there's an ongoing service attached. There's no such thing for patent (besides fee to file)

Why punish patent holders because of patent trolls or garbage patents ?

Make it unprofitable to be a troll, and they will go away. Trolls need to be tagged , like pirates. There should be rules to make hunting for trolls profitable. For that, you need a "bounty". Here's my take:

In any patent dispute[1], the loser will pay as punitive damages (this is the "bounty") to the winner, the lower of (i) the winner's legal costs, OR the loser's legal costs x 2, plus (ii) loser must disclose the ultimate name of the beneficial owners (or material, if public) of the loser. EINs not allowed. The "trolls" are thus, branded.

The next lawsuit ensues. During research, it is found that one of the parties is a known troll that has lost 1 prior case. Now the damages, should troll lose, are 2X of any settlement OR punitive amount.

Should troll lose again, an extra 2x (total, 4x) gets applied on the punitive damage[1] to the troll and so on. If troll wins, his x is halved.

This does 3 things:

1- Incentivize public to seek out weak patents, or trolls, for a payout.

2- Makes Trolling much harder at scale.

3- Ensures huge companies face risks if they throw their weight around. Bigco can afford $$ penalties vs small fish, but cannot afford to be tagged a 2-4x troll. It makes them an attractive target for bigger fish looking for the 2X or 4X reward challenge of Bigco patent portfolio.


> Domain names pay per year because there's an ongoing service attached. There's no such thing for patent

Erm, what service? A record in a database? How's that different from a patent office? I guess there's fancy registrar website...to do what...help me pay my recurring bill?


I don't think you are arguing in good faith.

OK fine want an ongoing patient fee ? Make it $9.99 per year just like a registrar, who gives you convenient ways to renew and pay fees from a working, modern site, and allow migration , with a few clicks.

Is that going to prevent trolls ? Unequivocally, no.

Parent was arguing for some ridiculous, unnecessary , tax. Then cited registrars as an example.

My point, 1 gives a service, one does not. If you want to charge for a service, then make it transparent and make the fee reflect the service, not argue "hey we already charge for registrars" to make his/her point about a new, unecessary tax.


I do not think you know the domain business, which I happen to work in (I own a small registrar and know people at registries). The reason domain costs money is to make it more expensive to hoard, not to pay for any service. There is a service but it just costs a tiny fraction of the registry fee the rest they often use for funding various non-profit initiatives to improve the internet not related at all the providing any service. The fee is set where it is to discourage hoarding.

Edit: It is also there to make it slightly more expensive to create scam sites, but mostly for the anti-hoarding.


Makes complete sense. Domain hoarding is not cool and makes sense to mitigate using fees as you describe.

Now, Patents already require fees and also substantial paperwork. In effect that is the "hoarding" control.

I stand corrected that the point of ICANN and registrars to charge something is to introduce a barrier to entry. Yet, I'd argue you are still providing a service if the fees go towards nonprofit activity to improve interoperability.

Yet, introducing a huge fee to patents wouldn't really be conductive to anything on the patent side, which is at the core my issue: I'm not making a judgement about the margin on fees, i'm questioning whether there's a semblance of service. From my vantage point, registrars have made massive improvements in accessibility and ease of use, and as you said, they have lowered the barriers to entry. | I can't say the same at all for patents.


> Domain names pay per year because there's an ongoing service attached. There's no such thing for patent (besides fee to file)

I work for a registrar and know people working at registries so I know that is not the case. The reason they charge more than like 1-2 dollars per year is to make it expensive to hoard domains.


Sadly though, not expensive enough to actually prevent anyone other than the very low end of consumers from hoarding domains.

I worked for a registrar for a decade+ and worked with a lot of hoarders. Very early on in my career I actually dobbed one in to our local registry authority (because I was naive, and he was CLEARLY breaching the requirements for our ccTLD and so I thought 'Well this is wrong and I should report it') and is how I discovered nobody actually cares about hoarding and just wants to maximise revenue. (Well duh I suppose.)


> loser must disclose the ultimate name of the beneficial owners (or material, if public) of the loser. EINs not allowed. The "trolls" are thus, branded.

So TrollCo will just pay a different homeless person $100 to be the owner on paper for each of their patents?


Sure. Let them deal with getting the homeless persons to sign up. Open a bank account, pay taxes, get credit cards, run payroll, process permits, etc.

I don't think you fully appreciate how tough is to run a business with someone's name on top of every document. Not to say its not possible for a determined actor, but its going to eliminate a lot of options from the get go.

Then, let a judge find out!


Another valuation/taxation scheme I've read about is: you can value your patent however you want, and it's taxed based on that value.

The kicker is: the values are public, and if anybody wants to buy it for something higher than the assigned value (or maybe some fixed percentage above the assigned value), you HAVE to sell. Of course, the buyer is then taxed at the higher value.


That seems like a terrible idea! If you underestimate the value of your invention, some big company can own it for $n+$.01. Or if you have invented something valuable but it takes years to get to market with it, you can go bankrupt in the mean time, or have your ownership eaten away by investors who suddenly have a ton of extra leverage over you.


>>These taxes can fund free education or healthcare or defense.

is it is always a bad idea to ear mark a tax for a specific purpose. Especially if you desire to use the tax as a punitive measure to reduce that which you deem bad for society, if it works now you need to come up with the money for the thing you funded elsewhere because all government programs are permanent

Look at smoking, all kind of things were funded on the back of smoking taxes, and when those punitive taxes worked to reduce smoking the revenue dried up but the budgets for for those programs did not so now the money had to come from somewhere else....

Using the tax code to punish or reward behavior is always bad


Using tax to punish or reward is called correcting externalities. More formally these taxes are called Pigovian taxes and they are supported by economists from all the schools, in similar vein to a land-value tax, because Pigovian taxes do not hamper economic producitivity.

You seem to misunderstand the entire concept of taxation, in its entirety, also. Taxes can either be used to raise revenue, or to correct for externalities. A tax that corrects an externality is valid on its own, EVEN IF, the revenue from that tax is burned or otherwise destroyed. It corrects for market failure, which leads to greater surplus.


> Using the tax code to punish or reward behavior is always bad

Isn't that pretty much the entire purpose of the tax code and why it's so complicated?

It's one of the tools the government has to shape behavior.

Actual tax revenue doesn't really matter since a permanent deficit and ever-growing debt is apparently fine.


While you are correct given the government debt levels and printing of money, on principle taxation should only be used to raise money for public purposes. Not to incentivize or punish behavior.

Allowing the government to use taxation for purposes other than public finance has been and will continue to be an avenue for abuse, and authoritarian control ultimately leading to tyranny


I generally think the principal of taxing property is fundamentally flawed (especially as it relates to property that has a market value that can be quite volatile or hard to value and even more so if the property generates no current income).

My rationale is that it means that only people that are rich can own property as they can afford the taxes, and especially if the property has increased in value over time and has no or small associated cash flows. By all means tax gains on realization (though I’d argue there should be a CPI adjustment to the basis but that’s another conversation)


This is an interesting point of view. Reminds me in some sense of some of the ethical justifications behind land value tax or property taxes.

The intention of legally enforced ownership is primarily to encourage development - and not to incentivize speculation as we seem to be doing in many situations. It seems reasonable to tax such speculation.

I'm inclined to agree with you.


We need a fair-valuation tax; patents taxed yearly on their declared value and mandatory sale of the patent to anyone willing to pay the declared value. Some kind of deferred tax schedule (maybe 5-10 years?) for R&D.


Why would we tax that property (at the federal level) and not others?

What would this do to people who file their own patents to protect their own inventions? Historically, that's been the vast bulk of all useful inventions in this country.


No, the fee should be exponential, to keep people from keeping technology out of the public domain longer than necessary.

For example, maybe the fee is $10000 for the first year. This doesn't come close to recouping the cost of a single enforcement action, but it makes sure that someone has some skin in the game. Then every year the cost gets 10x more expensive. Of course you are free to choose your own base and multiplier.

For someone to keep a patent for 5 years, the total cost would be $10k + $100k + $1M + $10M + $100M = $111110000. Maybe it's worth it for a patent like the light bulb. Probably not worth it for a drinking bird toy. But either way, the value decision is up to the patent holder, and the cost of the patent incentivizes rapid monetization rather than squatting.


Just curious: what about this comment made it worthy of downvoting?


I think a better model would just be something like adverse possession, where if the owner of the patent hasn't developed it, or done certain things it can be nullified.


patent maintenance fees are already higher than that.

amusing opinions that remind me not to trust them


> These taxes can fund free education or healthcare or defense

Why only those things?


Appeal to emotion. Taxes go towards all publicly funded projects, but it’s easier to convince people that a new tax is a good thing when it goes towards these things that benefit everyone.




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