Where is Bill Gates when you need him ?

[MSimon]

Sales tax is paid by the retail customer. How about a Value Added tax which is supposed to be paid by the producer and the middle men.

The problem with that is that it is based on the "value added" at each stage and every company has to be a tax collector. An end point sales tax is simpler giving lower drag.

The VAT requires computing the inputs subtracting from the outputs and then adding the tax. However, you then get in to the question of how the inputs are to be apportioned for a company that has multiple outputs. Things get complicated. Complicated is an invitation to fudging.

[ravingdave]

I am not completely certain I understand what you mean about taxing property as opposed to economic activity.

It's really pretty simple: In a state of nature, people acquire animal territory -- enough for replacement rate fecundity. That's virtually a tautology given a fixed carrying capacity. To acquire more elaborate properties, people enter into social contracts called governments. One of the key features of such a social contract is that the government provides a service of enforcing these more elaborate property rights. Think of it as a kind of mutual property insurance company specializing in theft and fraud insurance, with a strategy of creating a human ecology in which property rights are respected. The "insurance premiums" for this service -- the use fee for those property rights beyond animal subsistence (homestead) -- are the proper source of government revenue.

Now, the question remains: Are there any stockholders who may wish to receive a payout of dividends from the insurance company they "own" as a result of founding the insurance company? The answer is "Yes, of course there are precisely because of phenomena like the network effect that made Gates the world's richest man through no merit of his own."

The best way to estimate that founder's dividend is to take the in-place liquidation value of assets minus liabilities, assessed at their liquidation value as financial instruments held by creditors, and extract an economic rent dividend at the risk free interest rate used by modern portfolio theory (time averaged short term treasury rates). The only question then becomes "Who holds the founders shares in the insurance company which operates the land trust called the Nation State?" The preamble of the US Constitution designates the beneficiaries as "our posterity" so however that is interpreted, it is reasonable to treat it as an untaxed, multigeneration inheritance.

To apply this to Gate's fortune:

Imagine what the "in-place liquidation value" of his copyright on MS-DOS would have been worth shortly after IBM began distributing it for their first 4.77MHz 8088 IBM PC.

I would assume, not much. It is only after the market "froze in" backward compatibility that MS-DOS became an incredible asset. Had IBM gotten OS2 out the door quickly, Bill Gates would probably be a nobody.


I have carefully read your message, and I must say it is very abstract and difficult to follow, at least for me. If I understand it correctly, I think I must disagree. I have always thought that the word "Property" should imply ownership, and therefore it should be completely immuned from being ransomed by anyone, let alone the government.

The private ownership of property is considered to be a fundamental aspect of a free market system, and therefore essential to freedom.
I have long objected to the idea that I couldn't buy some land in the wilderness, and go live on it as a hermit refusing to participate in society or it's economic activity.

We all know that if anyone attempted such a thing, the tax assessor would eventually come to collect, completely unimpressed that you don't want to participate in society or economic activity, and the long and short of it will be that you shall be thrown off your land if you refuse to give them money.

Freedom is the absence of coercion.


David

[jabowery]

It's really pretty simple: In a state of nature, people acquire animal territory -- enough for replacement rate fecundity. That's virtually a tautology given a fixed carrying capacity. To acquire more elaborate properties, people enter into social contracts called governments. One of the key features of such a social contract is that the government provides a service of enforcing these more elaborate property rights.

I have long objected to the idea that I couldn't buy some land in the wilderness, and go live on it as a hermit refusing to participate in society or it's economic activity.

You are talking about "animal territory -- enough for replacement rate fecundity" which is specifically exempt. The only coercion you experience in that setting is that which anyone experiences in the state of nature -- and you retain your individual sovereignty over that territory with full rights of self-defense and armament under the social contract.

And you are wrong about MS-DOS under this regime: Almost immediately the copyright would have transferred to those in whom investors were most confident that they could create a superior operating system -- one whose value derived not simply from the position as gatekeeper to the liquid value of Moore's Law, but which added further, less liquid value by virtue of not being as obvious to the general financial community.

[ravingdave]

It's really pretty simple: In a state of nature, people acquire animal territory -- enough for replacement rate fecundity. That's virtually a tautology given a fixed carrying capacity. To acquire more elaborate properties, people enter into social contracts called governments. One of the key features of such a social contract is that the government provides a service of enforcing these more elaborate property rights.

I have long objected to the idea that I couldn't buy some land in the wilderness, and go live on it as a hermit refusing to participate in society or it's economic activity.

You are talking about "animal territory -- enough for replacement rate fecundity" which is specifically exempt. The only coercion you experience in that setting is that which anyone experiences in the state of nature -- and you retain your individual sovereignty over that territory with full rights of self-defense and armament under the social contract.

Okay, I think i'm following you on this. It's an interesting idea, but I need to have the concept fleshed out a bit more.

And you are wrong about MS-DOS under this regime: Almost immediately the copyright would have transferred to those in whom investors were most confident that they could create a superior operating system -- one whose value derived not simply from the position as gatekeeper to the liquid value of Moore's Law, but which added further, less liquid value by virtue of not being as obvious to the general financial community.

Are you refering to IBM investors, or MicroSoft investors ? Or are you meaning it in the sense of General Investors buying into the Operating system "Property" under this new (to me) concept ?


David

[jabowery]

And you are wrong about MS-DOS under this regime: Almost immediately the copyright would have transferred to those in whom investors were most confident that they could create a superior operating system -- one whose value derived not simply from the position as gatekeeper to the liquid value of Moore's Law, but which added further, less liquid value by virtue of not being as obvious to the general financial community.

Are you refering to IBM investors, or MicroSoft investors ? Or are you meaning it in the sense of General Investors buying into the Operating system "Property" under this new (to me) concept ?

The day IBM ships Gates MS DOS as the default OS on its 4.77MHz 8088 PC, the government receives $1B deposited in escrow at the short term treasury rate, from some savvy bidders in Portland, OR who A) understand Gates' rent-seeking game and B) have purchased the rights to Intel's RMX86 real time OS (remember?) and tweaked it to have a simple shell.

Gates immediately has to start paying the interest payments on the $1B into the escrow account until he decides he prefers just having $1B in cash in exchange for his copyright to MS DOS -- which should take all of 2 days.

The next thing you know, RMX86 is being distributed as the firstest with the mostest OS rather than MS-DOS. Now, the question one might ask is, "Why would these savvy bidders even bother with a real time multitasking multithreading OS when they could just as easily collect the economic rent stream that Gates was going to get from MSDOS?" The answer is that they know they _won't_ get that economic rent stream. They'll end up having to pay out a similar interest stream to the next highest bidder. The next question one might ask is, "Why would these savvy bidders then bother at all?" The answer is that they know that they are the _best_ OS guys... and therefore they can make more money off of this position than anyone else. The highest economic rent stream they'll have to pay is going to be less than the before-tax profit stream they can make. So the NEXT question is, "Well if all the money is going to the guy putting his money in escrow, where does the government get its money from?" The answer is that the government treats the bidder's escrow account as an asset, and therefore charges exactly what the bidder is making: the short term treasury rate. The NEXT question is, "Well then why would the bidder put his money into escrow when he could make a higher return investing it directly on his own? The answer is that the bidder doesn't have to be a rich individual -- it can be an investment pool of a lot of small bidders, each of whom has less assets than the homestead exemption -- so they all enjoy the full rate of return of the short term treasuries without being taxed at all. Remember, there are no business taxes and corporate assets are not taxed. Only the liquidation value of its stocks as held by individuals are taxed under whatever assessment of their individual estates applies. So then the NEXT question is, what are these small holder individuals going to do if they end up owning shares in a corporation that owns not short term treasuries, but the copyright for MS DOS? Well, the answer to that is in the faith they put in the management of the company that says they're the best OS guys in the world. At worst (because it would be hard to do worse than MSDOS as an OS), they'll enjoy the entire economic rent stream that Gates would have enjoyed, and their stocks will become so valuable that they'll hold more net assets than the median value of a homestead -- so, poor dears, they'll have to start paying taxes on the excess interest in the OS company.

Finally, we get to where the government collects its use fee for protection of property rights beyond homestead, and distributes the "profits" to the shareholders in the mutual insurance company it represents:

In those cases where the government knows the liquidation value of an asset is lower than anything currently in escrow to bid for it, it can place its own bid in escrow -- borrowing from itself -- and collect the resulting interest stream. If someone in the IRS itself tries to game the system by bidding up one of their buddy's assets to a ridiculous level so their buddy can take the bid and run, it will be relatively obvious as tax scams go -- requiring collusion with someone in public trust and authority who will immediately be exposed to investigation for conspiracy to commit fraud.

[MSimon]

The day IBM ships Gates MS DOS as the default OS on its 4.77MHz 8088 PC, the government receives $1B deposited in escrow at the short term treasury rate, from some savvy bidders in Portland, OR who A) understand Gates' rent-seeking game and B) have purchased the rights to Intel's RMX86 real time OS (remember?) and tweaked it to have a simple shell.

Gates immediately has to start paying the interest payments on the $1B into the escrow account until he decides he prefers just having $1B in cash in exchange for his copyright to MS DOS -- which should take all of 2 days.

Yep. All you need is a time machine so you can know that the deal Gates made was the deal of the Century and that some unforeseen event would not knock him out of the saddle.

So yeah. Once you are absolutely certain of the future value of something you can tax its present value at exactly the right amount. Of course you can also make capital accumulation impossible.

But you know - I don't think it is the government's job to make the economy "fair". It is the government's job to collect enough money to perform its function and its function should be as small as possible.

BTW the new guys who bought MS DOS should be equally punished depending on the vagaries of the market. If things get really volatile under your scheme we can get new management every 6 weeks. And there is nothing that improves business like reorganizing a company every six weeks.

[jabowery]

The day IBM ships Gates MS DOS as the default OS on its 4.77MHz 8088 PC, the government receives $1B deposited in escrow at the short term treasury rate, from some savvy bidders in Portland, OR who A) understand Gates' rent-seeking game and B) have purchased the rights to Intel's RMX86 real time OS (remember?) and tweaked it to have a simple shell.

Gates immediately has to start paying the interest payments on the $1B into the escrow account until he decides he prefers just having $1B in cash in exchange for his copyright to MS DOS -- which should take all of 2 days.

Yep. All you need is a time machine so you can know that the deal Gates made was the deal of the Century and that some unforeseen event would not knock him out of the saddle.

You're speaking to one guy who knew that. If you doubt it you can ask Ray Ozzie. He was around when Steve Freyder and I were doing the 8086 emulator just down the hall from his office, precisely because we foresaw it in 1978.

You apparently need to go back and read what I wrote earlier in this very thread about that era and what diverted me from pursuing Gates' monopoly position: I was working on just such an "unforeseen event", and it turns out I was wrong. Others may well have seen that my throwing in with the big players of the day like CDC, Knight Ridder and AT&T was a loser. Indeed, I would have stuck with the 8086 project if such a tax system had been in place because I would have been less fearful of a monopolist strategy in networking out of the big boys. I was really trying to head them off at the pass.

BTW the new guys who bought MS DOS should be equally punished depending on the vagaries of the market.

And they would be... the only question is whether they had made a correct estimate of their superiority over Gates when making their escrow bid. If so, then the margin they get to keep. Its called "intelligent investment" which many people think is what makes capitalism work. The only "taking" here is of the monopoly rent stream, and it is distributed to the shareholders. This _is_ capitalism -- in the raw -- where even force is privatized to maximize shareholder value.

And, yes, just as is the case with management vs shareholders, there is a tension: Keep the overhead of the bureaucracy low and keep the shareholders happy with a dividend stream.

[MSimon]

You're speaking to one guy who knew that. If you doubt it you can ask Ray Ozzie. He was around when Steve Freyder and I were doing the 8086 emulator just down the hall from his office, precisely because we foresaw it in 1978.

Well I was there too. Just not quite as close. I designed the I/O for the worlds first BBS in '78.

So you saw it. Why didn't you buy it up?

I think you make it clear in your post. No one was sure of where to place their bets.

[jabowery]

You're speaking to one guy who knew that. If you doubt it you can ask Ray Ozzie. He was around when Steve Freyder and I were doing the 8086 emulator just down the hall from his office, precisely because we foresaw it in 1978.

Well I was there too. Just not quite as close. I designed the I/O for the worlds first BBS in '78.

Come now... you're comparing foregoing an existing 8086 OS project for a joint venture between AT&T, the largest newspaper chain and some of the largest financial institutions to jump-start mass market electronic services to the home with foregoing nothing to do a BBS.

So you saw it. Why didn't you buy it up?

I think I've made my case quite well already but you may need to understand the full extent of this: I was in direct contact with David P. Reed (the End to End Arguments guy which founded the IP architecture) about (instead of the 32 bit IP:16-bit Port standard) getting all the commercial networking players into a 64-bit object naming scheme for connectionless method invocation that would have included both object serial number and system ID (growing from opposite ends of the 64 bits), with optional time coordinate addressing of network state straight out of Reed's PhD thesis. These meetings were ongoing not just with the VIEWTRON partners but with PARC within a year of them spinning off the LISA/Postscript to Jobs, not to mention Apple itself, Atari and Packet Cable (with Barans himself as CEO). I really did have more important potentials to attend to -- like bypassing the PC era entirely. It would have been the height of irresponsibility for me to short-circuit the network architecture I was putting together to take over Gates' monopoly.

I think you make it clear in your post. No one was sure of where to place their bets.

You didn't foresee the 8086 OS was going to be a gatekeeper and I did and if I did many others did, not just Bill Gates.

But really this is a red-herring. It doesn't really matter who foresaw that the 8086 OS that first was first mass-marketed with an open architecture like the ISA would be a monopoly. It only matters that it was a monopoly and that the profits therefrom are not a reward for creativity, but for, at best, foresight as to where monopoly rents were to be had. That's no way to maximize shareholder value in the land trust called the nation State.

[MSimon]

How are you going to get that $1 bn in escrow if it is not clear to the folks with money where the market is going?

In any case - the real screw up was in hanging on to a register oriented architecture instead of going to a dual (or more) stack architecture.

The processors just get more and more complicated (branch predictors? - long pipelines? - pipeline flushes?) consuming more silicon for marginal gains.

It does help maintain the big company monopolies on silicon. So I guess there is a benefit there.

And then the uglification that is C. Where you can write lots of short (but slow) modules - which is the right way. Or you can write longer (and faster) modules which are hard to test. And then you have abominations like & and * etc.

It is not just that DOS was a wrong turn. There were a bunch of them feeding into the mess. Eventually we will come out on the other side. But it sure hurts in the mean time.

[jabowery]

How are you going to get that $1 bn in escrow if it is not clear to the folks with money where the market is going?

I'm not sure when the first open press accounts appeared opining that Gates had a de facto monopoly on Moore's Law, but they were fairly early on in the game. I know that around the time BIX was opening up, I was opining that "Gates should be drawn and quartered in Madison Square Garden on live television" for having so botched the potential of the OS standard for the 8086. (I'm not so angry at him _personally_ now that I understand more of the political economic context within which guys like Gates rise to the top -- but I do believe he has a responsibility to use his wealth to correct this political economic context.)

The analogy with the register architecture and "C" is not apt: Both of those, like the 4.77MHz 8088 IBM PC BIOS and ISA bus, were totally open standards. Anyone could provide competition for implementations of those standards, just as Phoenix did very early, and as PC clone manufacturers did and as AMD did.

Microsoft consistently refused to open up sufficiently to let there be competing implementations not just of their OS APIs, but of their application stack dependent on the closed OS APIs.

[MSimon]

The analogy with the register architecture and "C" is not apt: Both of those, like the 4.77MHz 8088 IBM PC BIOS and ISA bus, were totally open standards. Anyone could provide competition for implementations of those standards, just as Phoenix did very early, and as PC clone manufacturers did and as AMD did.

The dual stack architecture was never part of the hardware mix. What we got was a lot of variations of the multi-register single stack architecture.

Open standards are good. But if the standards are wrong - then a wrong turn has been taken. And that wrong turn was due to network effects. It is not just Bill Gates. The wrong turn was taken very early. Processors had registers and calculations were done among registers. It probably started with Colossus - the code breaking computer.

[jabowery]

The dual stack architecture was never part of the hardware mix. What we got was a lot of variations of the multi-register single stack architecture.

Open standards are good. But if the standards are wrong - then a wrong turn has been taken.

I see the failure to enshrine Moore's architecture in hardware more a result of the destruction of the Yeoman culture of the US -- the culture exemplified in Tom Wolfe's Forbes article about the origin of Silicon Valley -- than either network externality or lesser forms of path dependence. The vertical integration of the big silicon houses to include processor architecture should never have arisen to nearly the degree it did and much more emphasis should have been placed on silicon foundry technology. This failure mode is pervasive -- including failure to find private funding for Bussard -- due to over-centralization of wealth resulting from collection of economic rent streams by the wealthy, the taxation of the economic activity by the government and a general ethos of greed in both the public and private elites.

Indeed, my original, 1992, white paper on tax reform was a direct result of my efforts to privatize both launch services and fusion technology development.

Moore should have had much more capital than he did and Intel should have quickly converted to serving independent architects like Moore.

[MSimon]

The dual stack architecture was never part of the hardware mix. What we got was a lot of variations of the multi-register single stack architecture.

Open standards are good. But if the standards are wrong - then a wrong turn has been taken.

I see the failure to enshrine Moore's architecture in hardware more a result of the destruction of the Yeoman culture of the US -- the culture exemplified in Tom Wolfe's Forbes article about the origin of Silicon Valley -- than either network externality or lesser forms of path dependence. The vertical integration of the big silicon houses to include processor architecture should never have arisen to nearly the degree it did and much more emphasis should have been placed on silicon foundry technology. This failure mode is pervasive -- including failure to find private funding for Bussard -- due to over-centralization of wealth resulting from collection of economic rent streams by the wealthy, the taxation of the economic activity by the government and a general ethos of greed in both the public and private elites.

Indeed, my original, 1992, white paper on tax reform was a direct result of my efforts to privatize both launch services and fusion technology development.

Moore should have had much more capital than he did and Intel should have quickly converted to serving independent architects like Moore.

Space services are going independent.

Moore is getting funding.
http://www.intellasys.net/index.php?opt ... &Itemid=75

And Bussard's work has a following.

In the beginning the advantage of microprocessors is so great that almost any design within the "accepted" framework gets funded. Then as capital costs go up the possibilities narrow.

Finally new ways of doing things are accepted when the old ways run out of gas.

I like your attitude in general. However, as the evolution of the steam engine shows - wrong turns will be taken. Mind space is captured. Gross inefficiency is no barrier to profit when the profit opportunities are huge. After all the first workable steam engines had boys controlling the inlet and exhaust valves.

We are at a point in CPU design where alternatives can be prototyped for a very modest investment.

Capital accumulation in numerous nodes is an advantage. It means that those with the interest and temperament can make their own decisions. Lots of starts.

Yeah it is a bad system. But all the others are worse. Sad but true facts of life.

[jabowery]

Space services are going independent.

Yes, only after pulling a lot of teeth by guys like yours truly.

Do you have any idea how much The Launch Services Purchase Act of 1990 cost me personally? The Fusion Prize legislation I put together with input from Bussard? The Bowery Prize for Amateur Rocketry?

All of which gave rise to the Ansari X-Prize?

These things didn't happen because of the invisible hand of the marketplace.

The form of capitalism we have is broken.

Moore is getting funding.

And Moore isn't even dead yet? *whew* THAT was close...

And Bussard's work has a following.

Yeah, after this:

"Note: As of April 2007, Dr. Robert Bussard, stated that due to the
publicity from his 11/9/2006 talk at Google and the 2006 Outstanding
Technology of the Year Award, the U.S. Navy sent him a contract
extension to continue his fusion research. "

http://www.habitablezone.com/space/messages/465715.html

Notice the dramatic change in traffic viewing Bussard's video as of November 18, 2006:



Then look at this slashdot article published Saturday November 18, 2006, @12:23AM:

http://hardware.slashdot.org/article.pl ... 18/0616205

Who is this Baldrson guy anyway?

Oh, never mind...

Capital accumulation in numerous nodes is an advantage. It means that those with the interest and temperament can make their own decisions. Lots of starts.

That's exactly why we need my proposed reform!

Do the arithmetic!

If Chuck had to pay NO TAXES until he had accumulated the median price of a home plus the median capitalization of a job and he didn't have to pay any patent fees let alone any taxes on royalties AND GUYS LIKE CHUCK were in similar positions, there would have been VASTLY more "numerous nodes" capable of supporting his architecture when it should have been supported 3 DECADES ago.

Yeah it is a bad system. But all the others are worse. Sad but true facts of life.

You are entitled to your opinion, but you are not entitled to impose your experimental treatments on people like me who would do virtually anything to escape this "least bad system" to take refuge in a territory under the system I propose. It's called "consent of the governed" and it has a lot to do with scientific ethics including informed consent to experimental treatment.