[sorcerer-mar]

And so... how does a property tax fix any of what you're describing? If it's a bullshit patent that's not being deployed to the market, it can't possibly be very valuable, ergo will have no carrying cost. Only the patents that are deployed to the market and valuable will have high carrying costs.

> But all too often it's a malign fantasy.

All too often to severely destroy the incentive to invent new drugs? Yeah, gonna need a better source than your intuition as a patent lawyer to substantiate that.

[dctoedt]

> Only the patents that are deployed to the market and valuable will have high carrying costs.

You're assuming that "deployed to the market" means "actually making things that people want." That's sometimes the case, but far from always.

You're probably familiar with the term "non-practicing entities" in the patent world. (They go by other names as well.) Some NPEs are entirely legitimate, e.g., universities and other major research centers that actually do research and discover useful things. Other NPEs, though, are more-vulgarly but aptly known as "patent trolls."

https://en.wikipedia.org/wiki/Patent_troll

[sorcerer-mar]

A patent definitionally only has market value (i.e. a value to be taxed) if it's something people want.

Right, I'm aware there's a spectrum from bullshit patent owners to non-bullshit patent owners. Why would you write a tax code to punish the latter while doing effectively nothing to the former?

You're fixating on the existence of bullshit patents which no one disputes. The question is whether this policy is a sensible way to address that, and you continue not to substantiate (or even articulate) any of your disposition toward that.

[dctoedt]

How about "to give the public a cut of the economic rents — i.e., private taxes — that the public is allowing you to extract from the market, which you get from your legal monopoly that lets you block competitors from copying you"?

Would that be an exercise of raw political power? Yup.

(The older I've gotten, the more I've drifted into the camp of the folks who think that society was better off when we had top marginal tax rates in the 80% to 90% range: Back then, your salary, your bank balance, and your yacht size weren't the most important metrics with which to measure your success in life. That's because, once you hit a certain compensation level, the government took most of the incremental increases. Innovators and business execs weren't notably less motivated back then.)

Or how about this: After an initial period of low taxation, we should heavily tax all patents. The idea would be to encourage owners of low-value patents to let them expire early for failure to pay the increased taxes. That would allow independent reinventors (of whom there are many) and copiers to do their own thing without having to worry that, if they make it big, the owner of a zombie patent won't suddenly appear with their hand out, demanding a cut. (Believe me, that happens.) That's kind of how patent "maintenance fees" are supposed to work now, but the amounts involved are utterly trivial and should be dramatically increased.

Yes, I know ALL about the economic rationale for having a patent system to mitigate the free-rider problem that discourages innovation. I also know all about how people work very hard to game the system. They're aided and abetted by patent lawyers who fervently believe in patents — and who of course want the paying work. (I knew an old-time patent lawyer, now long dead, who would sometimes tell clients — only half-jokingly — "If you paint it purple, I can probably get you a patent on it.")

[sorcerer-mar]

Sure, the model that you propose here sounds a lot better than the one being proposed by the current administration.

It seemed like you were suggesting that a property tax (which does not function how you just described) was a good idea, based on your initial comment which called it a good idea.