Do intellectual property rights involve a private power to tax?

Carla Marchese

Research output: Contribution to journalArticlepeer-review

Abstract

This article criticises the standard approach to intellectual property rights, interpreted as property rights conferring a monopolistic position, by showing that a public good is not a suitable basis for a private monopoly and that the bundle of rights included in an intellectual property right is so different from those enjoyed under a standard monopoly as to suggest that a different mechanism is at work, that is, a private power to tax has been granted. To highlight how this novel approach works, mainstream economic models of economic growth based on research and development, whether protected or not by intellectual property rights, are revisited. The theory of taxation is then recalled to show that taxes involved by intellectual property rights can range from an amount equal to the monopoly profit to Lindahl taxes. Finally, the principles of taxation elaborated by economic theory are examined for clues to improving the design of intellectual property rights.

Original languageEnglish
Pages (from-to)209-224
Number of pages16
JournalJournal of Public Finance and Public Choice
Volume34
Issue number2
DOIs
Publication statusPublished - Oct 2019

Keywords

  • intellectual property rights
  • principles of taxation
  • private power to tax

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