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Comment by toyg | Hacker News Reader

Incidentally, this is the real reason why "Western" states are so hung-up on copyright enforcement: nevermind the movie bullshit, IP is a door throughout which profits can be arbitrarily shuffled around by the rich and the powerful. It creates a parallel reality where imaginary goods can be transferred from jurisdiction to jurisdiction, creating infinite possibilities for transfer pricing. And if anyone objects? Ahh, they clearly want to starve artists and creatives!

It's genius, and we all go along with it because how can you hate art and imagination? It's such a fundamental side of human nature. By turning its output into pseudo-goods, we think we're moving up in the civilization scale, whereas we're just enabling a parasitical accumulation of capital.

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Can you explain how that works for someone ignorant like myself?

In general, every country you do business in will charge taxes based on the profit you make within that country. So what you do is:

* Set up a company in the country where you'd like to pay taxes, and give it all of your intellectual property.

* Set up subsidiaries in the countries where you don't want to pay taxes. Have them pay licensing fees to the first company for the IP, making sure to set the licensing fee high enough that the subsidiaries don't make much profit.

* Now most of your profit lives in the first country, no matter how much business you do elsewhere.

>intellectual property

A concept invented by and for lawyers. Call it imaginary property.

All property is imaginary. It's a human concept enforced by legal systems and force.

(Talking as someone who likes the concept of private property).

Physical property exists.

Physical things exist, the fact that they are attributed to certain humans as property is a social construct.

I don't think that it's productive to make up snarky names for concepts I don't like.

In this particular thread that is exactly what it is. A fiction to transfer wealth nearly tax free.

Imagine that there are two opposing views of a subject and then a big middle ground of people who don't care.

If the middle ground uses a term to describe a thing, then the wings have to use it as well. Or there has to be a real push by someone spending a lot of money on advertising to recast the concept. If someone goes around at the individual level making a thing of talking about "imaginary property" they are just going to look like an isolated crank. It isn't helpful.

On the other hand, when the attention of the middleground people is on exactly the aspect of the concept that one wishes to highligt, then that seems like the right time to highligt.

Tax-evasion done by money-transfers based on fictional value attributions of something. Seems exactly like "imaginary property" to me.

You can try. But the likely outcome is you'll spend a lot of time defending picking emotive word choices and the conversation is going to get distracted from substantive arguments.

> to recast the concept

I agree with both of you. I think the concept has to be recast, and that's going to be a very hard thing to do. I think a lot of money and effort was spent to cast these things as "Intellectual Property" in the first place.

However, it was on HN that I first saw the term "Imaginary Property", and I've seen that more and more lately. So there's hope. If usage of the term grows exponentially, it might happen.

Genuine question: does this require IP though? What prevents the subsidiary from paying the parent for "consultancy" or any other amorphous but non-IP service instead?

Most activities can be quantified, at worst by looking at sector averages. There is already plenty of tax law around those, about what you can and cannot realistically expect tax authorities to believe. The IP field, though, has massive value swings, that make it fundamentally uncontrollable. How much is the word "Starbucks" worth? How much is "Nespresso" or "Linizio"...? These can move hundreds of millions in one go, whereas you would struggle to achieve it with murky consultancy contracts over several years.

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