I recently read a proposal in a book that comes down to a new tax that is specifically aimed to integrate these breakup decisions into the market mechanics.
Basically, a company would pay a very progressive tax on its revenue (not profit) which reaches 100% at some high threshold value. This tax would be flat zero for the vast majority of enterprises, but would approach 100% as the company's revenue approaches something that is big enough to be relevant on a countrywide GDP scale. Since it would be applied to individual companies only, splitting a company up wod reduce the tax or more even eliminate it entirely.
The exact point at which it makes sense for a company to split itself up the depends on the industry and other circumstances, but thst ppind exists and as society we can control in which type of scale it lies.
Just thought it was a neat proposal, although it would of course require careful legislation to avoid loopholes and edge cases. It surely ald be quite difficult to implement, given the opaque ownership structure of many companies and the companies they in turn own. But maybe the fact that this is so complicated should already give us pause...
I suspect loopholes will be the big problem here. There will be an incentive to form a sort of cartel of entities that semble being small, but in reality act in unison/coordinated.
Sort of like the current scandal with price-fixing for apartment rentals in the US.
Basically, a company would pay a very progressive tax on its revenue (not profit) which reaches 100% at some high threshold value. This tax would be flat zero for the vast majority of enterprises, but would approach 100% as the company's revenue approaches something that is big enough to be relevant on a countrywide GDP scale. Since it would be applied to individual companies only, splitting a company up wod reduce the tax or more even eliminate it entirely.
The exact point at which it makes sense for a company to split itself up the depends on the industry and other circumstances, but thst ppind exists and as society we can control in which type of scale it lies.
Just thought it was a neat proposal, although it would of course require careful legislation to avoid loopholes and edge cases. It surely ald be quite difficult to implement, given the opaque ownership structure of many companies and the companies they in turn own. But maybe the fact that this is so complicated should already give us pause...