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Richard Stallman's Solution To 'Too Big To Fail'
lcam writes "A Richard Stallman opinion piece appears at Reuters addressing the 'Too big to fail' view that has recently caused large corporations to be bailed out by taxpayer dollars. His solution is elegant: 'We tax a company’s gross income, with a tax rate that increases as the company gets bigger. Companies would be able to reduce their tax rates by splitting themselves up.' However, it could use some refining. For example, his measure would create a required minimum 'Return on Investment' scale that corporations need to follow to be viable, and these types of metrics are very industry specific. Another issue is that many large corporations stay in business because they don't take unnecessary risk. Companies like Intel, Lockheed, Walmart are very large and have a very low chance of failure, yet Stallman would have them split up as a result of the excessive risks that banks and insurance companies were seen to have taken. It also has the potential to cause problems with the global market; some multinationals may find it better to simply 'move out' to a country that doesn't compromise their business models. How can this idea be made better?"
The originator of the idea.
Pass a failed law: Go to Jail. Politicians need to have fear of jail. Obamacare would have never ever passed.
What is missed is that "when you are to big to fail", you got that way by hiring ex-politicians, using lobbyists and donating huge sums to politicians in return for writing favorable laws.
In return politicians want "a return", so they put rules on things like the banks in order to satisfy their political party or favorite group.
The Community Reinvestment Act was obviously at the root of the MMM (mortgage meltdown mess), but we don't see any laws making politicians go to jail for having voted for that law and then failing to eliminate or restructure it when it was known it was going out of control.