Taihei Tengoku wrote:It's probably a mildly negative VAT, so at the point where the invented good is created the usual VAT of (for the sake of argument) 10% is waived for a rate of, say, -5%. The patent remains transferable as a claim for the tax refund. Length is probably a decade but I think there should be a longer patent for airplanes or other "long-lead" items. In any case what the Pigouvian subsidy is for ideas is an empirical question and I am shit at econometrics.
The point of this system isn't to maximize tax revenue but to maximize tax revenue growth (i.e. the productive economy). Rent-seekers will face competition from those who have access to the information of the patent itself and are aggressively trying to undercut them. Even if the inventor is subsidized if someone else steals all their sales away the inventor won't make any money because he isn't making any sales of his own.
That sounds cool aha. In your view, what would be the downside to Taihei Tengoku's patent system?