[HN Gopher] Self-Funding Harberger Taxes
___________________________________________________________________
Self-Funding Harberger Taxes
Author : surprisetalk
Score : 44 points
Date : 2024-12-04 17:03 UTC (5 hours ago)
(HTM) web link (gwern.net)
(TXT) w3m dump (gwern.net)
| PaulHoule wrote:
| I'd note you have to pay money to extend the life of a patent so
| a patent perceived to be worthless by its inventor expires
| quickly.
| tptacek wrote:
| As always, and tediously, I want to remind people that the
| lifetime of the artist should largely be irrelevant in thinking
| about rewarding the creation of new works. An author writes their
| most lucrative bestseller when they're 20 years old, makes K
| dollars; another author writes their most lucrative book at 75,
| makes N dollars. Why are K and N different? The answer today is
| mostly that they're not, because the lifespan of the copyright
| itself is taken into account when compensating the author.
| Without that system, the 75-year-old author would earn
| drastically less than the 20-year-old, despite creating the same
| value.
| alistairSH wrote:
| I'm confused... Are you saying the future value of the
| copyright is priced into the retail sales price of the book
| and/or % of that paid back to the author (or their estate) as
| royalties?
| andrewla wrote:
| They are saying that when an author is looking to sell the
| rights to their work, the price of that work is discounted
| based on the expected lifetime of the author.
|
| So in a parallel universe where the same work is written by a
| 20 year old and an 80 year old, the 20-year-old artist can
| sell the perpetual rights for more than the 80-year-old
| because the new rights holder will get 60 years of protection
| in the former case and only 10 years in the latter case.
|
| I don't think I agree with the GP on the conclusion, but this
| part anyway seems logically sound to me.
| alistairSH wrote:
| Hmmmm, need to think through this a bit. Most authors earn
| more from royalties than anything else, so when discussing
| "rewarding the creation of new works", that's where my mind
| went.
| tptacek wrote:
| Right, but those royalties are based on the value the
| copyright owners derive from holding the copyright.
| bryanlarsen wrote:
| I think that's backwards. The vast majority of all creative
| works make no significant profit past the first couple years of
| release. Publishers pay out based on what they estimate the
| work is going to make in the first couple of years, and
| discount the rest to 0.
|
| The publisher might know that the work of a 75 year old might
| actually have some back catalog value, so might be willing to
| pay for it. For a 20 year old, they don't know that and aren't
| going to pay for it, even if the copyright they're buying
| likely has a much longer time frame.
|
| If you used a 30 or 40 year old as your young example, I might
| buy the argument. Taylor Swift's back catalog as a 30 year old
| is worth hundreds of millions. Taylor Swift's back catalog as a
| 20 year old likely had an expected value close to zero, and
| there are very few 20 year olds as successful as Taylor Swift
| was at that age.
| tptacek wrote:
| It can't be "backwards". You can believe the effect is muted
| by the new-release window, such that for the majority of all
| titles --- let's say, for books, the midlist titles --- a
| drastic reduction in the length of copyright wouldn't impact
| the comp authors would get from publishers. But you can't
| logically argue about the sign of the effect.
|
| Meanwhile, virtually all of the copyright-driven industries
| are portfolio-based hit-seeking businesses. The comp for
| creators prices in some low (1-10%?) probability that a title
| will be a breakout success. Those returns would in fact be
| impacted by a drastic reduction in copyright terms.
|
| Either way though: none of this matters. The point is that
| there isn't a logical argument for tying compensation to the
| lifespan of the author. Authors reap rewards today for
| returns on their IP that occur posthumously.
| buzer wrote:
| One question here would be that how derivative works are handled?
| Like let's use some character as an example. They appear in movie
| with other characters. Would you need to pay for each character
| and movie separately? If movie gets bought out would that allow
| making other works based on characters in the movie?
|
| Also, would licenses terminate when copyright gets bought out?
| bastloing wrote:
| As AI takes hold it's obvious parents and copyrights will have to
| be revisited.
| pfdietz wrote:
| AI generation of inventions could be used as a massive DOS
| attack on the patent system, by producing millions or billions
| of inventions immediately placed into public view as prior art.
| niceice wrote:
| It was surprising to only recently learn how little money Gwern
| makes and lives off of.
|
| And then beautiful to see how the internet responded.
|
| https://x.com/Suhail/status/1857102763249004655
| kelvinjps10 wrote:
| Where it was mentioned?
| jaggederest wrote:
| For posterity, what's the current ballpark? I enjoyed that when
| I looked for it I found his comments from 2013 on HN talking
| about it.
| niceice wrote:
| From https://www.youtube.com/watch?v=a42key59cZQ
|
| Dwarkesh Patel
|
| How do you sustain yourself while writing full time?
|
| Gwern
|
| Patreon and savings. I have a Patreon which does around
| $900-$1000/month, and then I cover the rest with my savings.
| I got lucky with having some early Bitcoins and made enough
| to write for a long time, but not forever. So I try to spend
| as little as possible to make it last.
|
| I should probably advertise the Patreon more, but I'm too
| proud to shill it harder.
|
| It's also awkward trying to come up with some good rewards
| which don't entail a paywall. Patreon and Substack work well
| for a lot of people like Scott Alexander, because they like
| writing regular newsletter-style updates but I don't like to.
| I just let it run and hope it works.
|
| Dwarkesh Patel
|
| Wait if you're doing $900-1000/month and you're sustaining
| yourself on that, that must mean you're sustaining yourself
| on less than $12,000 a year. What is your lifestyle like at
| $12K?
|
| Gwern
|
| I live in the middle of nowhere. I don't travel much, or eat
| out, or have health insurance, or anything like that. I cook
| my own food. I use a free gym. There was this time when the
| floor of my bedroom began collapsing. It was so old that the
| humidity had decayed the wood. We just got a bunch of scrap
| wood and a joist and propped it up. If it lets in some bugs,
| oh well! I live like a grad student, but with better ramen. I
| don't mind it much since I spend all my time reading anyway.
| andrewla wrote:
| Over time I have become more and more skeptical of Harberger
| taxes, which I first encountered somewhere in the works of
| Heinlein.
|
| The idea is that you are taxed based on your own estimate of the
| value of a thing, with the estimate being public and binding as a
| sale price.
|
| This sounds incredibly simple, with a natural mechanism of
| enforcement; if you undervalue a thing to pay lower taxes then
| you risk losing it at that price.
|
| But I don't think this would work in reality. Pricing things is
| super hard. In a very liquid market it is difficult but doable,
| in an illiquid market (of one non-fungible asset) it is
| practically impossible. At what cadence do you update the
| estimate? How long is it binding for? If the value suddenly
| changes, how long a grace period do you have before you have to
| update the price?
|
| You can try to patch this by saying that you have a right of
| first refusal -- that if someone offers to buy the asset at the
| price then you can accept their valuation as the new estimate of
| the price, and pay taxes going forward on the new value.
|
| But then this defeats the point of the process because
| effectively the valuation is non-binding. So you have to put in
| all sorts of structures to prevent abuse -- maybe levy fines for
| past underpayment when the pricing is adjusted, or limit the
| number of re-pricings per time period.
|
| And it incentivizes nuisance bidders, because owners will defend
| their property. So you have to put in restrictions like forcing
| escrow before the sale, or limiting bidding by a single entity.
|
| Not to mention the difficulty in maintaining this registry of
| ownership of these assets, along with how to deal with more
| complicated deals about the rights involved -- film rights vs. tv
| rights vs. print rights, rights to individual characters,
| temporary licenses, etc., and all of that needs to be mechanized
| to allow a certain fixed list of the types of rights that can be
| granted, which right now is as extensive as a contract can
| contain -- if Sherlock Holmes were still in copyright, what if I
| just wanted to license Watson or make a film about Moriarty?
|
| This is all just hopeless technocratic pie-in-the-sky dreaming.
| nightski wrote:
| Another problem in my mind is most creators could not afford
| the taxes for a high enough valuation (early on at least), but
| investment groups like blackrock could buy up all the
| copyrights/patents on the cheap. It also does not prevent the
| Disney scenario when a copyright is absurdly profitable. They
| could pay the tax indefinitely.
| jaggederest wrote:
| There's an even simpler reason to be skeptical: They're
| complicated, and people don't understand complicated things, so
| they'll never happen.
|
| Most people don't even correctly understand how progressive
| taxation works, so anything more complicated than that is dead
| on arrival.
| andrewla wrote:
| I think the appeal is that it sounds simple -- you say "I
| bought my house for $1M, and I don't want to move, so I set
| the value at $2M, so I have to spend $20,000/yr to keep it,
| or someone can give me $2M and take the house."
| jaggederest wrote:
| I think that drastically underestimates the (american, at
| least) knee jerk opposition to taxes, discomfort with
| novelty, and fear of having to move. Why would anyone go
| from a place where they pay a flat percentage of the
| assessed value to this new framework?
| maxerickson wrote:
| For the love of market efficiency!
| notahacker wrote:
| That's the sort of thing that sounds very _unappealing_ to
| the average voter. "I have to pay property tax on
| substantially more than it's worth and keep raising it on a
| regular basis, otherwise some property speculator might
| make me homeless" is much easier to understand than
| notional efficiency benefits.
|
| Same goes for the Harberger tax on copyright, which is
| basically "only people and corporations who are already
| rich deserve to extract market value from their creations"
| currymj wrote:
| realistically there should just be some kind of homestead
| exemption for one primary residence. several states already
| have such a system, where you get reduced or frozen
| property taxes, and protection during bankruptcy.
| m463 wrote:
| might be that the more onerous a taxation system, the more
| likely society will implode.
|
| the stamp act, the townshend act, the boston tea party,
| etc...
|
| might be "tax what you want less of" might be... citizens.
| stonemetal12 wrote:
| >if you undervalue a thing to pay lower taxes then you risk
| losing it at that price. This sounds incredibly simple...
|
| That doesn't sound so simple to me, everything has to be for
| sale all the time and\or you over pay on your taxes. Value your
| vehicle at market rate to pay the "right" taxes, anybody in the
| market for a vehicle can come buy yours at $1 over market rate
| if they want to. (It costs 2$ to drive to the closest one being
| sold at market rate, so it makes economic sense.) The only way
| to even partially defend yourself is to value your property way
| over market rate and pay taxes higher than the market value
| would suggest. Basically you have to value your stuff at market
| rate plus how much I would be annoyed to loose said item.
|
| Piss off a billionaire? Guess who is never going to live
| indoors again.
| bombcar wrote:
| You also have the silly situation where _everything_ I own is
| worth _more_ to me than it is worth - otherwise I 'd have not
| bought it.
|
| And even if my car is worth $5k, not having to sell it and
| buy another one (even if I can find it) is worth a premium.
|
| It's likely that _something_ like Harberger taxes could work
| in certain situations, but not normal people ones.
| danaris wrote:
| The most glaring problem with taxes of this form in the system
| we have today is that there is no way to price it that does not
| either price regular people out of the system or allow all
| regular people's assets that fall under this scheme to be
| purchased for (relative) peanuts by the superwealthy and
| megacorporations.
|
| That is to say, the prices you'd have to set to prevent very
| wealthy bad actors from just buying up _everything_ and holding
| everyone hostage to it are so high that regular people would
| never be able to sustain them. And once they have obtained all
| the Stuff, even if they _can 't_ change the rules to make it so
| they no longer have to pay, they only have to keep the
| Harberger prices high for a fairly short time for the rents
| they charge us to bleed us dry enough that we have no chance of
| buying any of it back.
| andrewla wrote:
| I think asking people to put a value estimate on a thing is a
| hopeless task. The idea of having some sort of structured market
| for it is even more hopeless.
|
| Better to just have a fee structure that starts off as the price
| of a carton of eggs and doubles every year that you extend it.
| AlotOfReading wrote:
| The dynamics are more interesting if you make a small change to
| this scheme: force the owner to accept public domain buyout if
| the value in the fund (+ interest less overhead) exceeds the
| current valuation. It also acts as a built-in termination period
| for orphaned works, since there may be no owner to actually
| accept an offer.
| vessenes wrote:
| Gwern, some anecdotal thoughts from the world of business, where
| this sort of blind committed self pricing is sometimes called a
| "Mexican Standoff". Same idea on, say a cap table -- both parties
| agree that in event of a dispute, they will make sealed binding
| offers for the whole company; higher offer must pay. I often
| recommend this to young startup CEOs when they have a team they
| haven't worked with before, and I've occasionally suggested it to
| business partners.
|
| Although I like the intuitive simplicity and game theoretic
| aspects of the arrangement, I've never seen it get through a
| partnership agreement or shareholder agreement round of redlines.
| Often lawyers feel nervous about it, and they'd prefer to
| litigate anyway; a space they are comfortable assessing and
| handicapping (and billing for). Often one party feels less
| sophisticated than the other, and thinks there might be a trap
| somewhere in there. Most sense, I think, that this sort of
| arrangement benefits the wealthier party. I think Harberger taxes
| suffer from the same sort of problem: the most money wins the
| asset.
|
| You mention, rightly, the absolute trash heap that Brian Herbert
| has made of Dune. You speculate, wrongly, I think, that this
| arrangement would have cut him out and protected the IP. Au
| contraire -- I think Brian has done very well financially from
| this IP ownership -- sadly, enshittification pays -- and I don't
| see any reason to think that better stewardship would have
| resulted in more money to go buy out the IP than Brian's made.
|
| Particularly in a world of art and human creative output, I'm
| negative on forcing IP rights to the wealthiest owners -- I'd
| prefer a system that leaves it in the hands of people who might
| have a variety of interests that could dominate, even if that
| gives us some tragedies in exchange.
|
| Anyway, a system of transparent IP with buyout values (or
| reference values) attached is not, to my mind, uniformly better
| than what we have -- the reference values will be wrong, they
| will not capture non-monetary value, and they don't guarantee a
| ready buyer. It's hard to see what we'd gain; I agree that we
| wouldn't lose a lot, but there's a lot of social and legal work
| to implement between here and there.
| JackYoustra wrote:
| This is a really good idea, at least for now on large-scale
| abstract things such as radio spectrum and airline gates.
| Problems about liquidity can be solved with access to finance,
| which exists on easy to model things (such as, again, radio
| spectrum and airline gates) and then gradually expanded over
| time.
| FactKnower69 wrote:
| imagine spending weeks crafting pages of incomprehensible
| reformist apologia for a uselessly broken and totally unnecessary
| system
| doctorpangloss wrote:
| Is dynasty (family) inheritance of copyright assets (books and
| music) really that big of a problem?
|
| Was Dune mismanaged? We got a lot of movies, TV shows and a
| famous video game from it!
|
| Was Borges estate mismanaged? Wiki talks about two examples that
| are not dramatic.
|
| What is the idea?
| HideousKojima wrote:
| >We got a lot of movies, TV shows and a famous video game from
| it!
|
| We also got Brian Herbert's terrible Butlerian Jihad books
| nickff wrote:
| There could be an incentive to produce even more 'terrible
| books' with a shorter or more expensive copyright window.
| observationist wrote:
| I don't see malice sufficiently addressed. A billionaire could
| identify arbitrary copyright arbitrage opportunities in
| particular communities or among groups of individuals and buy out
| copyright, and hold on to them out of spite until the value of a
| property is lost, or manipulate memes and the spread of culture.
|
| Deliberately giving things to the public domain, software
| licensing, and other issues arise in the context of hostility and
| malice and bad people existing. Stuff like this would only work
| if everyone participated in good faith.
|
| By the time we figure out any sort of sensible copyright rules,
| AI will have made a total mockery of our systems, anyway.
| efitz wrote:
| Copyright and patent are legal privileges (specifically a time
| limited monopoly on a work or invention), not natural rights.
|
| The US Constitution proposes them as a way to "promote progress
| in the useful arts" and specifically calls out their time-limited
| nature. I think that "authors life + 95 years" arguably stretches
| "limited time" beyond reasonableness, but I digress.
|
| There is a real cost, both to the society the law serves, and in
| the operation of law enforcement and judicial infrastructure
| needed to support copyright and patent enforcement.
|
| Even if you 100% believe in copyright and patent, it seems like a
| reasonable thing for the direct benefactors of copyrights and
| patents to substantially bear the cost of enforcement. A one-time
| filing fee (for patents) and nothing (for copyright) seems low.
|
| There is also a societal cost in suppression of innovation by
| allowing these to last long periods of time, so it seems
| reasonable that the cost structure should be (1) related to the
| value of the work to the creator/inventor, and (2) incentivize
| shorter times, especially if the values involved are low.
|
| I don't fully grok Harberger taxes but it seems to me that they
| try to satisfy both my proposed criteria, but are flawed in that
| the value is stated by the inventor/author without proof. Maybe
| I'm misinterpreting but I see other comments to that effect.
|
| My proposal is to make the fee structure impute the value, by
| increasing over time. For example, we could require a fee of
| $1000 for issuance of a copyright or patent (separate from the
| application fee). The term would be for one year. The
| patent/copyright holder can extend for as many years as they
| want, but the cost goes up 10x each year. If it's a valuable
| asset, you'll keep paying until the cost of extension exceeds
| your perceived value. Now the value is established by the most
| informed party in the market.
|
| This is my proposal. You can of course tinker with lengths and
| amounts and increase factors.
|
| In sum the idea is that for valuable works (a Marvel Avengers
| movie or the patent on the RSA algorithm or a cancer drug) the
| copyright/patent holder will keep paying for many years until
| it's not profitable anymore. For works that have little market
| value, they would fall into the public domain quickly and be able
| to help improve other works or inventions, and inhibit rent
| seeking. It practically eliminates the incentive for patent
| trolling, or for suing an artist decades later for having a beat
| similar to a song 40 years ago, or for establishing huge
| defensive patent portfolios. The economics aren't there anymore.
| adamc wrote:
| The fundamental idea here is that you have no intrinsic right to
| the things you already possess. Should we force people to pay
| additional taxes on other property in order to continue to
| possess it? I think that would be wildly unpopular, but unless
| you're willing to do it in general, aren't you just picking on
| subpopulations you don't like?
|
| The fact that BigCo. might be able to exploit an IP for some
| purpose -- perhaps making commercials out of popular songs -- in
| a way that would lead to revenue does not intrinsically suggest
| that it would be a good thing. Why shouldn't the artist retain
| control? Why shouldn't his heirs (who have already paid
| inheritance taxes) retain control?
|
| Should an individual unable to pay taxes on his own organs lose
| them to someone who will pay the market value? I think most of us
| would think that grotesque. And it's grotesque because the
| viewpoint behind it -- that the highest bidder should
| automatically win, that it is intrinsically the "highest" and
| best purpose -- is grotesque.
| pydry wrote:
| >Should we force people to pay additional taxes on other
| property in order to continue to possess it?
|
| That is generally how property taxes are supposed to function.
|
| It's better than taxing the output of hard work - work, unlike
| hoarding, is generally something we want to encourage.
| robertlagrant wrote:
| > It's better than taxing the output of hard work - work,
| unlike hoarding, is generally something we want to encourage.
|
| To what hoarding are you referring?
| blacksqr wrote:
| The international Berne Copyright Convention was founded in the
| late 1800's precisely because Victor Hugo thought artists
| shoudn't have to think about such things. Copyright is automatic
| upon creation of the work and guaranteed for at least 50 years
| after the author's death.
|
| Almost all countries are now party to the Convention, including
| the USA.
___________________________________________________________________
(page generated 2024-12-04 23:01 UTC)