WhyNot?

anti-trust via jumbo taxes

Category: Public
Responses: 2 (1 in support, 0 neutral, 1 in opposition)
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IMO the trend towards huge mega-merger corporations has gone way too far. Having more competition encourages better ideas & better service & so on.

I don't get excited by imagining the US government trying to break up corporations by law... but maybe one that would hit only the top 200 corporations as defined by a formulas (Forbes?) as of each January 1st. Maybe 500 would be a better number, but the idea is to make firms avoid getting on the jumbo list & eager to spin off non-core divisions.

So either get small... or stay small... or pay big.

wizard1961, Nov 26 2008

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Would you want to break up the top 200 corporations every year? After a couple of decades, there wouldn't be any large corporations left. The largest ones would be rather small. Would you still break them up too?

Dwane Anderson, Nov 26 2008

Yes, kill them all.

Um, well, maybe we could tweak things after a while. I don't think we can predict how things might unfold... so this was a starting point.

Personally, I like laws with built in "sunset" clauses, and that might be appropriate here.

wizard1961, Nov 27 2008

I've always felt 'safer' working for a large corporation and because they hire so many people, they have better benefits and are more in tune with what wages should be. Whether I'm safer or not is disputable, but an employee gets more warning with a big company, by law they have to announce layoffs months in advance.

It is true that there are large corporations that do bad, but they're worldwide, so breaking up US corporations would put this country at a disadvantage.

If a company is making money, that means it's providing a good or service that people want. This is some people's definition of 'doing good'. If it's not making money, then I don't believe that we should support them with government funds, but certainly governments shouldn't go around destroying wealth and success for no reason.

Eventually all companies pass and little companies will take their place--it would happen more naturally if the government didn't intervene so much. Elephants die and ants eat them.

hrench, Nov 29 2008

The point is that too few competitors in any industry leads to stagnation. There will still be large companies, and very large corporations... but do we need totally huge corporations?

Innovation comes from competition.

This tax would not destroy wealth or success, it would encourage firms to remain nimble and to concentrate on their core abilities while outsourcing other functions to specialists.

If General Motors, for instance, were to split itself into 3-7 entities, the result would be better for consumers. Do organizations lose intelligence as they grow in size, or does it just seem that way?

Would the un-merging of some of the oil companies lead to different attempts to make money while supplying energy? Would those other methods lead to something important?

Since most agree monopolies are bad, I think having only two or three competitors is not great. There is a limit, of course. Some large companies are great. But in general, since the Reagan years, the rate of mergers has, to me, been alarming and dangerous.

wizard1961, Nov 29 2008

this video about corporate tax is pretty convincing.

http://www.youtube.com/watch?v=QSB_-g-GQCA&feature=channel

hrench, Dec 18 2008

Its a good video & I agree with it... but it is barely related to my idea. Sure, let's cut corporate tax rates. But let's make the really huge corporations pay more & discourage the ginormous mergers & so increase competition & innovation.

wizard1961, Dec 18 2008