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If IP Is Property, Where Is the Property Tax?
nweaver writes "In a response to the LA Times editorial on copyright which we discussed a week ago, the paper published a response arguing: 'If Intellectual Property is actually property, why isn't it covered by a property tax?' If copyright maintenance involved paying a fee and registration, this would keep Mickey Mouse safely protected by copyright, while ensuring that works that are no longer economically relevant to the copyright holder pass into the public domain, where the residual social value can serve the real purpose of copyright: to enhance the progress of science and useful arts. Disclaimer: the author is my father."
On the face of it, I love that idea. The bigger question would be how do you determine the value of the IP to assess it for taxation.
I'm sick of following my dreams. I'm just going to ask where they're goin' and hook up with 'em later.
Real property (real estate) has property tax, but no one taxes you for personal property.
I am sitting in a chair, no one is going to TAX me on the fact that I own some chair (personal property).
Weak argument.
Its easy why it isn't, almost everyone owns some piece of IP. For example, this comment, it could be considered IP, now should I have to pay essentially a fee on that? No. Or what about a program I wrote, should I have to pay a tax to license it under say the GPL? What really needs to happen, is lower copyright terms and the abolishment of the "forever copyright" and also, what in the world does the government do with all their copyright fees?
There is no "disagree" moderation, and troll, flamebait and overrated are not valid substitutes
There are fees associated with maintaining patents (due at 3.5, 7.5, and 11.5 years), and failure to pay them on schedule results in cancellation of the patent.
For example, the kid who wrote Chocolate Rain has a potential revenue stream from the YouTube advert. You can bet he wouldn't have guessed that he would get almost 15 million views - so he would automatically have ceeded his potential copyright into the public domain. Someone else who saw the potential could have stepped in, linked it to all the right sites, and took all the advertising revenue for themselves.
This is an issue which will resolve itself just as soon as the internet becomes the main (legitimate) medium for entertainment distribution. At this point all the money currently spent on old media advertising follows the shows to YouTube or whereever they are being distributed. This creates, in effect, a democratic marketplace which rewards creativity; which will allow viral video authors to generate a revenue stream and (if they wish) go mainstream. Well, that's the dream, anyway.. and at that point all the big copyright trolls can go fuck themselves as their precious content they horde will have become almost worthless.
I think Heinlein had the solution to that (he used it for real property). You declare a value, you pay taxes based on that, and anybody can force you to sell it to them at that price.
-- Support a free market in the field of government
The whole problem with requiring an annual fee to maintain your copyright is that the little guy would get screwed. Many artists spend their whole life creating and virtually starving to death (because sales require promotion and promotion costs money), only to become successful at the end and their early work thereby becomes profitable. They could not afford to maintain their copyrights if fees where involved and then Mickey and friends could step in a utilize their work for nothing.
A better solution would be to only charge a copyright fee on copyrights held by corporations (i.e. created under a work for hire license or purchased from the artist). When the artist who created the work still holds the copyright (and has no contractual obligations to a company on the use of that work) the current system works fairly decently. Since a company's main priority is its bottom line, unprofitable works would be released into the public domain sooner, but the little guy would still be able to benefit from his / her individual work.
Technology is most abused by the very people it was created to help
Patents have a maintenance fee. Why not copyrights?
Why not charge a maintenance fee for copyrights every ten years? That way, most stuff will go into the public domain ten years after publication. It won't bother most people, because most people's copyrighted stuff isn't valuable the next day, let alone ten years later, and if it is they can always extend it.
The hard part would be figuring out what to charge for copyrights of commercial material, like proprietary software, books, music, and the like. I'm sure people can figure out something halfway reasonable, likely on the low side.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
The idea of property tax is that the owners of property owe something back to society. The idea goes back to feudalism when the land owners were feudal lords. Instead of(or in addition to) taxes, feudal lords could be called on to send knights into battle as a condition of their land ownership. If they couldn't fulfill the duty, the land would be taken away and given to someone who could...
The same idea could be applied to intellectual property. The owners of intellectual property should be required to give something back to society. As some other posters have pointed out, the problem becomes valuing the property. The easiest way to value intellectual property is by how much income it brings in to the owner.
By that measure, intellectual property is already taxed. The tax is simply paid through the corporate or individual income tax.
If you had super powers, would you use them for good, or for awesome?
Property tax is evil, and it should not be legal. The whole point of property is that once you have something, it's yours and no one can take it from you. With property tax, it's like you don't really own your property, and you are just renting it from the government. Once you stop paying, they come and take it away from you.
Moreover, if you are going to ask where is the tax on IP, why don't you ask where the tax is on everyday objects around your house. Where is the property tax on industrial equipment, where is the property tax on you bank account, your stock investments, the money other people owe you, labor contracts? All these things are forms of property that are used to generate revenue but are not taxed under property tax.
The government should not be able to place an arbitrary value and tax rate on any property. I should have the right to be secure in my possessions. If I don't have that right, I don't have any property at all.
Well, it's not quite what I would suggest, but it's far from a terrible idea; in fact it is similar to how we used to do things only a few decades ago.
We should have a system of copyright where an author only gets a copyright if he publishes his work, registers for a copyright, deposits a copy of the work, and pays a token fee. And where the copyright only lasts for a few years before the author must renew the copyright (if eligible, depending on the kind of work and the number of times it's been renewed already).
We know that this would work well, since it's more or less what US copyright law did up until 1978. We know that the goal of copyright is to serve the public interest by encouraging authors to create works they otherwise would not have created, but having those works minimally protected and in the public domain as rapidly as possible. This serves this goal well, since probably only authors who were encouraged by the availability of copyright would bother to undertake even the very simple steps to procure one. Further, if an author was encouraged by a shorter duration than the maximum allowed, he would likely fail to renew (as usually happened historically), getting that work in the public domain much sooner than if we foolishly gave him as long a term as we could without any involvement on the author's part. It gets copies preserved in the Library of Congress, which can help to ensure the survival of the work over time (especially once it enters the public domain). And requiring him to identify the work claimed, and himself, and his contact information, aids in the public knowing what is and isn't protected (like the title system for land), who to talk to about it, and where he can be reached if you need to license it, etc.
Sure, some amateur authors would create works without regard for a copyright, and the works might turn out to have been valuable, but so what? The system isn't meant to help them at all costs, it is meant to encourage them to create what they would not have created sans copyright. Your Chocolate Rain kid probably wouldn't qualify. That's good, really. Why should the public pay for the cow if the milk is free? Copyright isn't meant to help authors, or be fair to them; it's meant to be totally one-sided in favor of the public, but sometimes the thing that is most in the long-term public interest isn't what is in the short-term public interest.
(Plus of course, only an author can claim a copyright on his works initially; it's not as though anyone could take a public domain work away from its author, who could also try to exploit it for money; it's just that the author cannot exclusively exploit it)
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
The idea is very good. Even not performing assets (i.e. unrented buildings) pay property taxes; of course, if I'm getting $3,000 a month rent from an apartment it is very likely that my property taxes will be higher than if it is a rundown hole in the wall, but even then taxes must be paid.
Buildings pay property taxes to pay for public services, like public works, fire and police protection, road and sidewalk construction, snow removal, animal control, etcetera. What essential services do you plan on providing to my recorded thoughts, ideas, and code?You don't make the poor richer by making the rich poorer. - Winston Churchill
What a great idea! We could have a schedule of taxes or fees due every few years to maintain IP or it would become dedicated to the public. We do that with patents.
Or, if that's too complicated, we could just ask copyright holders to identify which copyrights they care about and submit a simple application to maintain them or let them flow into the public domain. We did that for nearly two centuries until 1976.
It's just amazing how little we demand that the holders of incredibly valuable copyrights do to obtain those rights and to keep them.
"We reject as false the choice between our safety and our ideals." --The American President (20.1.2009)
Enforce the laws that says that others are not allowed to copy it.
>I've been advocating that exact idea for a while, with one slight change: if that happens,
>the IP in question goes into the public domain instead of to the purchaser.
GPL and public domain are not the same thing. Linus owns parts of Linux and holds a trademark on Linux in some countries. He could not afford to pay such taxes, so a company like say microsoft could come along and use his code under these laws.
In general, these laws make no sense and would hurt open source developers even more than closed source developers.
Finally, these are in no way analogous to property tax because property tax is just on land, not on the various other things you own. Also the federal government doesn't even collect property tax. It's a stupid idea that would hurt everyone.
Instead of having the assesment burden on the owner of the IP, let's put it on the collector of taxes, or the buyer of the IP.
Every idea is assumed to be worth a nominal hundred bucks until the govt tax collecting agency can find a bidder. Once they have a notarized bid ( maybe with some percentage deposit ) then they go to the owner of the IP and inform him that his idea is now worth more than a hundred dollars, and he should start paying more taxes on it.
The IP owner then has two choices: He can assent and start paying the tax, or he can agree to sell it. If he agrees to sell it, the govt collects the money, gives it to the IP owner. They also collect a few percent fee for their services, so that the whole process is fee-based rather than taxpayer-supported.
If the owner of the IP is broke, he need not submit just for financial reasons. The 'notice of value' is a negotiable item, and a bank would be willing to accept it as collateral on a loan - because they can cash it in if the loan defaults. The big corporation would have to be careful about trying to squeeze the little guy, for in doing so, they give him collateral to start a competing business with the IP.
I've lived in states where property taxes were aggressively enforced by municipalities on such varied things as artwork, out-of-state or un-plated vehicles (even if it was never registered or driven on public roads), even office furniture and equipment. In the U.S., sometimes they're administered -- and therefore vary -- at the state level, in other areas it's devolved down to the city/town/county level.
Some states (Florida that I'm aware of specifically) had/have an "intangible personal property" tax, specifically on things like stocks, bonds, bearer notes, money market funds, pretty much anything that's worth anything. Florida's was recently repealed, but it's not like the concept is totally foreign or anything.
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> Property taxes pay for services that the government provides to land owners...
> but what services does the government provide to IP owners?
The government enforces the monopoly they granted you by using it's monopoly on the 'legitimate' use of force. You would be paying the government to send it's goons against any who violated your copyright.
But copyright ain't property, at least it ain't in the US. Our Constituition only grants Congress the option to pass out copyrights/monopolies to promote science and the useful arts. It they were property, for one thing they wouldn't be 'for limited times.' Property implies moral issues but since Congress could by simple majority vote cease issuing any new ones it can't be a property right. Nope, Copyrights and Patents are just a form of 'Industrial policy' for the creative trades. Same as any other Industrial Policy, Farm Policy, Blah Blah. It can and should be adjusted to get the maximum benefit to those in the industry, the country at large and yes, the federal treasury.
I'd suggest something along the following lines:
No more automatic copyright. Screw Berne. Register it or it doesn't exist. Copyrights would have a registration number assigned and they should be international; something like year-country prefix-number. That would allow people to actually KNOW when a copyright had expired by looking the number up in an online database. As things currently stand you needs lots of research to know if a work is actually in the public domain.
Registering should cost a non-trivial amount and it should vary by some sort of catagory chart. Not fair? Who said it was supposed to be fair, it's Industrial policy remember? Articles and books at low rates, television programs at a higher one and movies at a percentage of gross. Good for three years, renewable. Renewal rates set to discourage hoarding low value content while allowing marketable franchises to be milked a bit. After all, creating something of lasting interest in this short attention span culture should be rewarded. But make each successive renewal more exensive on a log scale. Yes, Disney could keep the mouse for a century but the price for a copyright that long should be expressly punitive.
Democrat delenda est
I'm going to ignore patent here. Intellectual property is not all of one kind. I mean here mostly copyright and maybe also trademark, since these are about creativity, not discovery. But the issues are so different that raising them together is confusing.
My first thoughts on this matter went to the nature of real property that allows us to tax it. We don't tax the ownership of a refrigerator. Why should they be different. I have to assume it's that no one is busy making more of it, and so the mere holding of it is a tax on others, who might like to use it. In that sense, if real estate tax can be justified (and I might later argue that it cannot), then the justification is that you're taking up a critical resource from the get go.
In fact, though, copyright is not of that kind. If Gone With The Wind or Cinderella were not created by their respective authors, then those works are just simply not there at all. (You can make whatever claims about a million monkeys you want, but we're not taking more monkeys, we're slaughtering them, and I don't think they'll have the time.) New works of original authorship don't take up space. They are made out of nowhere and every new such work potentially enriches us. So taxing them would be like taxing someone for making new land. If someone could do that (on demand, I mean, not the way we're doing it in the artic with all that melting), I would think twice about taxing it. The making of new land seems a useful skill in a world that is ever more crowded.
While copyrights on newly authored works don't hurt anyone, there is ultimately a cost to the world of allowing one person to continue to hold copyright ownership beyond a reasonable limit, since at some point the world needs to build on what others do.
But the notion that someone should have to pay from the first day of creation for the right to have created that work is the most horrible and regressive tax I could imagine. It would create a ticking clock that would limit the bargaining power of new authors in dealing with publishers, who could afford to outlast the author and just publish the work when it fell into the public domain for non-payment. It would favor the big guy over the little guy. None of that is good.
The middle ground that I might consider would be a tax on long-term extension of copyright. Right now, we continue to extend the copyright term in order to accomplish that. But perhaps a middle ground that says that if Disney wants to extend its rights on a certain work, then it should have to pay heavily for that beyond the reasonable duration of 50 or so years that all authors might reasonably claim to allow them to pursue the use of their works within their own lifetime.
I might even make the claim that real property could use the same protection. If I work my lifetime to buy a property and then at the end of my lifetime lose my job and can't pay the taxes to sustain my ownership, why should I end up with an untaxed refrigerator which I can keep because it's my property, but not a house I can keep? Where is the incentive to work for something that can be taxed away as soon as you own it? I can totally understand a tax on the estate, since my heirs didn't earn the money, and a reasonable argument might be made that they should make their own fortunes. Passing along money to help a young person get started in life, an impoverished person break even in life, or an aging person retire comfortably is one thing, but ensuring that a dynastic fortune consolidates the power for one's progeny is another.
In a sense, the continued use by Disney of intellectual property is the same kind of moral issue. The Disney of today is enriched, perhaps unfairly, by the work of prior generations. Taxing that seems reasonable in a way that is different than taxing you or me fo
Kent M Pitman
Philosopher, Technologist, Writer
See, IP isn't a thing. Bob won't treasure his IP like it's an old car. Maybe he's proud of the idea, but if he's not charging licensing fees from it, does it matter whether he wants it or not?
If he seriously TREASURES it for non-monitary reasons and doesn't want to let it fall into the hands (and he wants to be able to freely use it), all he has to do is announce that it's now public domain.
Taxes, gone. Mega corp gets their IP for free and poor $70k Bob gets to use his IP all he wants.
The ONLY REASON to keep IP exclusive, is for monitary gain, isn't it? Make it public domain if you value it for the esoteric social benefit it provides...
Your "vintage car" analogy is odd as IP isn't a thing that can be "taken away" when you have the option to make it public domain where the result is "everyone in the world who cares to have one gets their own, with my name stenciled on the bumper".
*shrugs*
SI
Repeat after me: you don't have to declare the "true value of your assets", which is an entirely imaginary notion, except in the tax year when you have *realized* capital gains *by selling the asset*. Lets say that four friends and I get together to form the Pasty-Faced White Guy Boy Band. We write our single "I Cheated On You But Now I'm Sorry Please Take Me Back". It costs us nothing to write, so the cost basis on that song's copyright and associated IP is zero. We perform it for a while, and release it to the Internets, to the adoration of millions of spurned women everywhere. I receive an offer from Big Record Company to purchase the rights to the song, in perpetuity, for $1 million dollars. I reject it.
Where do I put the million dollars on my tax return? Nowhere. No income means no income tax.
Now, had I accepted the offer, I would have realized capital gains of $1 million (probably split five ways), less the $0 cost basis in ICOYBNISPTMB. That would require me paying taxes -- likely at the long term capital gains rate, not as income, in the most plausible reading of my imaginary scenario.
Now, let's say that I reject the $1 million offer, and then subsequently sell to Timmy The Two Bit for $50,000 to prevent the bank from kicking me out of my house. In this case, despite the fact that you might feel my song is still worth $1 million, I would be assessed taxes on only $50,000 of capital gains. Even if the song made me a million in sales in the month before the sale, it would still be *fairly valued* at $50,000 after the sale actually takes place, assuming I am not engaging in tax fraud outside the scope of this hypothetical (for example, by doing a transaction which is not at "arms length" -- perhaps selling to a confederate with the promise to buy back in the next tax year and benefit somehow from a stepped up cost basis).
Help poke pirates in the eyepatch, arr.
(Well, there's already been a flood of posts on this one, but anyways .... )
[1] FWIW I think the idea of a copyright tax is a good one, for the sake of making commerically unimportant copyrights available.
[2] The tax doesn't have to be a big one to be effective, and any realistic tax would have to be on a uniform basis and a reasonable level to be administratively workable. Patent renewal fees already exist and are like that, and they do result in many patents being abandoned to the public domain before their term is up.
[3] An additional advantage of a copyright tax would be that in the case of items that might look like 'abandonware' but are not, the tax register would help people's efforts to find the person claiming the copyright, if they want to fix up any kind of proper licensing permission.
[4] A big difficulty in the way of implementation, is that copyright law conditions are now set by international treaty, the Berne Convention. This says that copyright has to be available without formality. So it isn't any longer up to Congress just to alter the law, unless they also want to leave (denounce) the Berne Convention (this would result in lack of mutuality of copyright protection between the US and just about every other country, an inconvenience and cause of loss and expense to copyright holders that caused the US to join the Convention in the first place.)
So, international negotiations would be needed to insert some kind of 'sunset' clause into the Berne Convention. Or else, the tax could perhaps be brought in for some other effect, short of ending the copyright, like maybe avoiding a presumption of licensing-as-of-right: this could be legislatively created for untaxed copyright works. (But I'm not sure that even that would be compatible with the existing Berne Convention anyway.)
[5] So, all in all, the idea sounds good, but is probably impractical until the international climate (in which the US govt currently has a big influence) moves away from the tendency to tighten IP nooses, and starts loosening up.
-wb-
So you establish a reasonable period of monopoly that's tax-free. Say, for the first 5 or 7 or even 10 years a copyright is tax-free. The entrepreneur then has a reasonable window to derive value at no cost, but corporations still cannot exploit the system forever for zero cost.
The problems in patent and copyright law, while they may seem similar, are actually quite different. I agree that a patent tax would likely cause more problems than it solves. But copyright is a different animal. Copyright law doesn't have broad coverage, trolls or rewards for gaming the system -- not until you hit the megacorp level and game the system via lobbyists.
The biggest problem in copyright law is simply that copyright terms are far, far too long.
The real drawback to TFA's proposal is that it gives permission to megacorps to hold copyright in perpetuity, so long as they kick back some cash to Uncle Sam. Under the proposed scheme, Mickey Mouse will -never- fall into the public domain.
Now, I don't have a very optimistic view that lobbying won't manage such perpetual copyright -anyway-. But that doesn't mean I'm comfortable in embracing it up-front, just because Washington would get a taste.
// "Can't clowns and pirates just -try- to get along?"