I think the only time a Harberger tax makes sense is for illiquid investments, such as investment real estate. Everywhere else, the forced buying and selling creates more problems than it solves.
In this example of Disney's IP - it takes a lot of time and money to make a movie. A competitor to Disney could wait until they announce a new movie and then forcibly buy up enough rights to make the movie illegal to release. It encourages and creates a framework for sabotage among competitors.
The steady state is that one mega corp emerges victorious. Disney sets up a script that forcibly purchases any "super hero" adjacent IP. No small time creators would ever be allowed to exist, when large corporations are allowed to smother them so easily.
I also strongly disagree that this is the simpler option. Figuring out how to price your property and how often to re-asses would definitely bring about OP's concern of "gets messy, encourages dishonesty, and pretty much forces a new subindustry to spring up."
Pure Harberger taxes aren't a perfect fit for copyright--7 initial years free* is what one fan of the original paper proposed--but I can't see how, compared to existing copyright law, they encourage dishonesty, get messy, or require new industry (a sufficiently large IP company might shift some spending from lawyers to valuation and risk assessment).
> A competitor to Disney could wait until they announce a new movie and then forcibly buy up enough rights to make the movie illegal to release.
In a de novo work like Toy Story, or a fully licensed work like Wreck-It Ralph, Disney owns the rights and knows their value when they announce the upcoming film. The problem only occurs in cases like Lion King, where an existing folk story gets Disneyfied, with no compensation, and often no credit, to the cultural originator of the story.
I'm ok with Disney needing to pay extra money while their competitors pay extra taxes, in cases like this.
> but I can't see how, compared to existing copyright law, they encourage dishonesty, get messy, or require new industry.
The comparison was with OP's suggestion of replacing copyright with a simple tax, not with current copyright law. I agree Harberger taxes would be simpler than the existing system, though still not preferable.
> In a de novo work like Toy Story, or a fully licensed work like Wreck-It Ralph, Disney owns the rights and knows their value when they announce the upcoming film.
Sure, but a competitor could steal the rights out from under them in the time between announcing the film and the film hitting theaters.
There's another issue with not-yet-profitable IP. With Harberger taxes you wouldn't be able to protect IP while you're still working to build products around it. This is another way that smaller / new players get screwed with this type of system.
As I said, the forced buying / selling creates way more problems than it solves. All we are trying to do here is determine how high a tax should be. Inventing a scheme where people and companies can steal from each other (for a fee) is always going to have worse second order effects and be more complicated than just coming up with a price formula for the tax.
The “initial duration X free” I mentioned solves all these problems without producing very onerous complications.
Even if it didn’t, a small creator could get immediate cash infusions simply by pricing his newly created characters at a large multiple of what he thinks he could make off them—that way, Disney’s buyout is a providential windfall instead of legal thievery.
I think you’re undercounting the benefits and overcounting the side effects of incentive compatible mechanisms!
> The “initial duration X free” I mentioned solves all these problems without producing very onerous complications.
I guess that depends on how you define it. All the marvel characters and stories have existed for decades. The only thing new about the movies are the movies themselves
> a small creator could get immediate cash infusions simply by pricing his newly created characters at a large multiple of what he thinks he could make off them—that way, Disney’s buyout is a providential windfall instead of legal thievery.
Yeah, and run the risk of bankrupting themselves from the tax bill in the process.
In this example of Disney's IP - it takes a lot of time and money to make a movie. A competitor to Disney could wait until they announce a new movie and then forcibly buy up enough rights to make the movie illegal to release. It encourages and creates a framework for sabotage among competitors.
The steady state is that one mega corp emerges victorious. Disney sets up a script that forcibly purchases any "super hero" adjacent IP. No small time creators would ever be allowed to exist, when large corporations are allowed to smother them so easily.
I also strongly disagree that this is the simpler option. Figuring out how to price your property and how often to re-asses would definitely bring about OP's concern of "gets messy, encourages dishonesty, and pretty much forces a new subindustry to spring up."