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Comment by CPLX | Hacker News Reader

We could also just put a tax of 100% on any revenue in excess of $10bn a year and nip this entire society-destroying problem in the bud.

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That -sounds- simple, but it isn't, and in reality any company would easily bypass that by simply creating other companies to take some of the revenue. They already do that to avoid international taxes. As an example, the US charges tax on all income coming to a US company so companies have entities in countries like Ireland and Luxembourg to keep that money out of the US government's reach.

So Apple might have $100B stuck in Ireland, unable to bring it to the US, but it doesn't matter, that money still counts for their shareholders.

And it's the same thing here. If you try to tax $10B they'll just have 100 companies all making $9.9B/yr, in a variety of different countries, completely separate from each other, and you're back where you started.

And while this would be extremely complicated/expensive for them to manage, it'd be profitable because the alternative is to get a 100% tax on those profits.

Taxes aren't easy. And calling a company that sells phones a "society-destroying problem" is a bit hyperbolic, don't you think?

There’s nothing simple about it. It would require pages of statute as well as regulatory guidance, and some of the most wealthy and capable forces in our modern world would be arrayed against it trying to avoid and evade the rules.

None of those things make the proposal impossible however.

It would be a dismal society indeed if we unilaterally surrendered to every instance of centralized malevolent power without a fight.

So what happens to the company spending 10.5bn to earn 11 bn? They just get a net loss of 0.5 bn?

edit: Or lets pick a real example and see how that works out. ArcelorMittal is a major steel provider. They sold $53B last year. They had a tough year though, so their final net loss was actually about half a billion.

Under your proposal, they would have lost 43 billion dollars. Uh oh, you just collapsed the steel industry.

I assume the idea is that large companies such as this would have a period of time to scale down operations to the largest size where it still makes sense, and then more competitors would pop up to take over the market share they leave behind. I’m not defending the proposal since I’m too ignorant to have an opinion worth speaking out loud, but that was my interpretation at least.

It’s even simpler. They’d split up into pieces.

Seeing as how there are very few massive companies that weren’t created by piecing together smaller companies in the first place it shouldn’t confuse anyone. Also companies spin off parts constantly when they think it’s in their interest so they idea they won’t know how to do it is frivolous.

You could certainly make an argument that my $10bn number is too low, or that there should be a sliding scale of some sort but the concept and it’s likely outcome is very easy to understand.

It's a silly idea because plenty of companies have high revenue and low profit (or net loss), and are not anti-competitive in the slightest. An arbitrary revenue cap doesn't help the situation at all, as evidenced by the steel company.

Disincentivizing growth is... dumb.

Nah. Splitting up ArcelorMittal is a fucking great idea.

Our competitive landscape is being absolutely choked by anti-competitive behavior, monopoly, and single point of failure problems in supply chains, labor markets, commodities markets, and everything else.

It’s unsafe and bad for society and we should take decisive and aggressive action to stop it.

Instead we’re so accustomed to it and dulled into submission by decades of corporate PR efforts that people will somehow think it makes sense to reflexively advocate for lawless monopolists[0] on message boards in the name of “growth”.

[0] https://www.reuters.com/article/us-arcelor-africa-antitrust-...

https://www.hindustantimes.com/business/arcelormittal-fined-...

https://www.luxtimes.lu/en/business-finance/arcelormittal-fi...

I am sympathetic to your argument, but it would be stronger if you didn't project the "why" onto a large group of people. It's pretty clear that the reasons are complex, nuanced, and possibly only a problem at scales most of us never encourage. (I think there are probably also benefits of the large size, e.g. Walmart has completely changed what you can buy for low prices, which has incredible value to many people)

Also, I'm not sure the SPOF problems are a result of anti-competitive behavior - AIUI, it's because JIT delivery between different entities is far more cost effective, and the human brain tends to ignore hidden risks.

While I would definitely entertain extreme tax tiers at high revenue limits (like $10B/yr), it is important to note that there is value in Apple making money.

There are a lot of jobs created between the $10B and $1T levels. And as citizens of Apple's home nation, it greatly benefits us that those high-quality jobs are available.

A 100% tax (or even 80%) tax would discourage a lot of products from existing. Apple would probably move down to simply offering just phones and apps only and removing everything else. I know that sounds good in theory, but there are indirect benefits for these other services that they offer, in addition to jobs. It also bolster's California's economy all the way down to bodegas, bars, restaurants, and hobby shops.

So an alternative tax like 60% on revenues above $50B that can not be deducted against might be a more reasonable alternative.

It's an interesting thought experiment at least. What would the hidden incentives of something like that be?

For example, if a company wanted to keep growing, it would have to split organically into separate corporate entities. What would stop them establishing "favored" relationships with each other? Say for example Facebook splits out "Zuckerburg data centers inc" - what's to stop them pricing themselves above market to avoid taking on other customers, and then giving FB a hefty discount? You could mandate that there be no board overlap, but shareholders would probably receive a split.

You'd need to actually draft a law rather than write it on a napkin and there would be armies of very well paid lawyers trying to avoid it, but that's common to any attempt to break up concentrated power.

In that context it wouldn't be all that hard. You'd need to figure out some definitions for common ownership, joint enterprise, and so on. A lot of those laws and definitions already exist. It's only really in the last few decades that we've abandoned antitrust law but we have successfully done things like this in the past.

When have we capped the potential revenue of companies successfully in the past? I've never heard of it

If Zuckerberg data centers wants to keep growing, then at some point they will have to find external customers.

Too easy to get around, as soon as company A starts making $11B they make a new company B that charges $1B for some random service, probably "consulting".

Thats actually what a lot of firms do, and what was really prominant in the Cannabis industry;

Cannabis companies couldnt do "real banking" do to federal shenanigans.

So instead why dispensaries would do, is make another LLC who buys the building and all the building permits that are municipally regulated - then as the municipality zoned and approved locations and projects for dispensaries and distribution licenses (which had a multitude of their own specific restrictions)

They would then rent the facilities for ridiculous rental amounts which the rental company would legally be able to put into any regular bank - then make loans to the cannabis companies and dispensaries for whatever operating expenses were needed.

This got really ugly when Med Men, based out of LA, was made really public because of douchebaggery happening in the company revealing how they had been gaming their own investors etc...

Why not $9bn a year?

You got to start the discussion somewhere.... For me, I t think that it should be related to the number of employees.

A cap on employees would probably be a negative thing, but a cap on revenue per employee would incentivise hiring people

that's the solution

Talking about monopolies, why does Facebook and HN have network issues at the same time.

Maybe people visit other sites when the ones they would have used go down? I don't know for sure but it is a plausible explanation for me.

makes sense but at the same time it surprises me

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