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California Lawmaker Proposes Music Download Tax
modemac writes "Sacramento, California Assemblyman Charles Calderon wants to expand a 75-year-old sales tax on 'tangible personal property' to include music downloads from iTunes and other music-download sites. The tax would specifically apply to music downloads, but the estimate used in this article for revenue generated by 'Net downloading also "includes pornography downloads." The measure, AB 1956, will be considered on Monday, April 14th."
Does this mean we might be able to get a tax deduction for pr0n?
Since all the pr0n is from California anyway, does this mean we owe back taxes from all those free downloads?
Absolute power corrupts absolutely. indymedia
Does that mean that, in California, we'd actually own the music files, and would not be able to be prosecuted for shifting those files, breaking the encryption, etc?
Also, what does "tangible" mean? To me, it means something a bit more permanent than bits on a disk. After all, if someone gets near it with a magnet, there goes your "tangible" property. The same cannot be said for a car, a bookshelf, a can of paint, etc.
If music, etc is "tangible property" now, does that mean we get the same kind of fair use we expect from the other kinds of "tangible property" we own?
That should read: "Idiot Lawmaker Proposes Music Download Tax" but that may be redundant. Besides the obvious fact that it would be very hard to police (esp. the pr0n) this would lead to more piracy. Only legitimate outlets would be effected.
"But his measure is being soundly criticized by Republicans, who are opposed to any tax increases to solve the deficit problem."
So if you're not FOR the tax, you don't want to lower the deficit!
" His bill, AB 1956, comes as Apple reports that its iTunes store has leap-frogged over Wal-Mart to become the top music retailer in the United States with more than 4 billion downloads sold."
Odds are this bill comes AS A RESULT of iTunes leapfrogging Wal-Mart.
Apparantly they think music piracy isn't rampant enough and feel the need to encourage it with a tax on legal downloads. Smart.
Is it considered property when you don't "Own" it? If I owned the music that I downloaded, I could give it away for free, and not be breaking the law. Instead, I am told that I don't own it, and am violating the IP of company X. In a way, this law could be a great thing, as, if they can tax it, then you must own it. If you own it, you can do whatever you like with it. Of course, IANAL, so this could all just be a pipe dream on my part.
Doesn't tangible personal property imply it's a good I could re-sell?
If I buy an iTunes track, it's mine, sorta. But, I can't resell it, or give it away, or what have you. It's not tangible by any meaningful sense of that word. It's not like in a bankruptcy proceeding they could seize my music collection to help pay off my debtors.
And, porn? Really? They think people are gonna pay tax on all that free porn they're pulling off (ahem) the internet?
Seriously, yet another lawmaker who wants to monetize the internets to try to generate some cash or protect a special interest, and who doesn't actually know enough about the topic at hand to say anything reasonable. Hopefully, someone can slap some sense into him.
Cheers
Lost at C:>. Found at C.
No kidding... I thought the whole point of sales tax was SUPPOSED to be that it supported the infrastructure (roads, etc.) needed to actually sell the product, which is why sales tax makes sense as far as ordering off of, for example, Amazon.com goes (stuff still needs shipping). As far as I am aware, the government doesn't actually have an infrastructure to support regarding just downloads. The entire cost is borne by ISPs and the site you download from (thus, by extension, the consumers themselves).
I see no need for a sales tax on downloads other than padding pockets and paying for totally unrelated projects.
psmylie's dictionary: Godzillion (noun) Any number large enough to destroy Tokyo
... Which is why I don't buy songs from online stores.
If I don't own the things I buy, I'm not going to pay for the privilage of not owning it; I may as well not own it for free and download it off LimeWire, or borrow a mates CD.
Good luck policing that last one, by the way.
Side note: My CAPTCHA image? "copied"
Finally had enough. Come see us over at https://soylentnews.org/
Two points
.008 cents).
1) If it is property... then Riaa is going to start paying taxes on it. And of course property tax is value based so RIAA will have a reason to value their property lower.
2) As the value approaches zero, the tax approaches zero. If you sell 1,000 songs for $1.00-- the tax on 1,000 songs is 8 cents (or
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Given that this is California, that could take quite a byte out of the deficit.
Lacking <sarcasm> tags,
A tax on downloads is the worst possible way to handle this.
First, it does not solve any of the "problems". Any of them.
Second, everybody is being charged for a "problem" (the quotes are on purpose... I don't agree that there even is a real problem here) caused by a relative few.
Third, the money is going to the wrong people.
And so on. It's just a BAD idea.
California is facing some enormous budget shortfalls and the Democratic controlled state legislature simply will not cut state spending. Arnold (by no means a hard right winger), tried to cut spending but met with a hailstorm of resistance in a state whose politics are dominated by powerful unions.
Democrats in California have already been arguing for a tax increase, and in that environment, saying that sales taxes have to be paid on internet items might be politically the easiest thing for them to do. After all, they could argue, somewhat disingenously - why should everyone else pay taxes, but internet businesses not?
This is my sig.
in the digital world, there is very little difference between "viewing" and "downloading" so where will the line be drawn?
in the case of pr0n, even if you don't download it to your hard drive, if you can see it in your browser, you have downloaded it. (duh, you got the data somehow) would this same principle apply to net radio, streaming music, youtube, etc? makes you wonder how far they will run with it.
In Soviet Russia jokes are formulaic and decidedly non-humorous.
Interesting, I've always paid state sales taxes on my iTunes downloads here in Maine. I never realized until now that some other states [who have sales tax] weren't doing the same.
Alcohol and tobacco are two examples of legal products that are taxed to hell. There is not a large black market for these items. I would expect Cannabis to behave similarly. It would cost maybe 50 cents to manufacture a pack of joints and you could retail it around the same price as cigarettes. Plenty of room for insane taxes but the retail price is just too low to have organized crime rings fighting over the market.
Man, you really need that seminar!
This rasies a basic question: Which state can collect a tax on an Internet-based sale, the state where the seller operates or the state where the consumer makes the purchase?
Let's say I live in Vermont and I buy a song from iTunes, which is based in California.
Vermont claims that people owe it sales tax because they're in Vermont and buying something in another state that they could be buying here. If a Vermont resident goes to another state with no or lower sales tax to buy a car, Vermont requires that they pay Vermont's sales tax equal to the difference between the two when they register it in Vermont. There's also a section on Vermont tax returns that asks state residents to estimate the sales tax we would have paid if we'd bought something locally instead of through a Web site that, at present, implies that if they buy music through iTunes they should be paying state tax on the purchase.
The California proposal seems to think consumers are going, in a virtual sense, to California to buy my music. Because the transaction happens in California, they want to collect tax.
The Vermont requirement is apparently widely ignored and impossible to enforce unless the out-of-state business collects the tax for it. The California proposal would be enforceable only as long as the iTunes music store is hosted there. It would likely be moved off-shore if this proposal passes.
This will likely take Federal legislation or a Supreme Court decision defining the basis for where a tax is levied: on the location of the consumer or the location of the business. If the former, every business with a Web presence will have to incorporate 50+ different tax rules based on customer location, possibly more if they serve international customers.
It would be simpler would be to tax where the business is located, but then most states would object to the revenue loss and businesses would move their Web operations to states with low or no sales tax or off-shore (which would then likely cause Congress to pass legislation allowing states to tax their residents for out-of-state purchases anyway).
As always, it's about money which is of course is the root of all evil, which makes us a really evil society.
TLR
A man no more knows his destiny than a tea leaf knows the history of the East India Company
only the rich have computers anyway
they need to pay their fair share those dirty rotten music down loaders
we are taxing perverts, you want to tax them, right?
it is for the children.
the revenue will go towards reducing our impact on the environment!
which statements can we queue up to support this? I expect the bulk of them to show up at one time or the other
Sorry, it never ceases to amaze me that when facing a spending problem their first reaction is to increase taxes.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Publish "expert" testimonies from many professors from major universities detailing how such a tax would cause a major recession in the state and also snatch money from schools and education and send it to wall street
Let's look at reality here. Taxation and fiscal policy plays a huge role in where businesses live, consumers shop, and people live. Taxes do make a determination as to whether or not to engage in a business. If your gross profit margin is ten percent, and taxes are fifty percent on that activity, there's a much lower chance of you engaging in that activity, then, if the tax was ten percent.
But really, all you really have to do is compare those areas that follow the standard left formula of high taxes and big public works, versus those states that try to do things on the cheap. Ireland has the lowest corporate taxes of any industrialized nation, and they are booming. In the USA, rustbelt states, in particularly, Michigan, follows the formula of high taxes, and no one in their right mind wants to build a business their either. Cities all across the United States are leaking people because the taxes are much higher their than in the suburbs. Similarly, states with high taxes are gradually losing people to those states that do not have high taxes. Why anyone in their right mind would live in New Jersey is beyond me, and a lot of other people feel the same was as the state is experiencing a net decline in people, and has to sell its Turnpikes to try and make ends meet.
Now, it is always the Democrats that talk about sending money to Wall Street or to Big Oil or Big Computers or Big this or big that, as if, to engage in a business and to make a profit is a crime. I'm always amused by Obama's ads, talking about how he will make sure that Big Oil won't make a profit either, because they don't deserve it when the price of gas is so high. I have to wonder, where were the Democrats when hundreds of thousands of oil workers were getting laid off during the 1990s, and the very survival of Exxon was at stake. Ultimately, oil, like many other companies are boom and bust operations, and they are either booming or busting. But given that, the question is, if you have a President or a political party that sets the tone that for you to get rich is a crime, why would you even bother to invest where-ever that party has power?
This is my sig.
Trust me, I work for the government.
So what you're saying is CA plans to subsidize our internet connections... sweet!
So looking at this guy's legislative website, he claims to be a 'first Latino to do this and that'. He's most proud of getting legislation passed to 'force drug dealers pay for the damage that they cause their community'. So it would appear that he specializes in vague undefined pseudo-laws primarily designed to shake down anyone without the resources to prevent this from happening (lawyers in the USA, private armies in Mexico). Basically another fine-and-upstanding slimeball politician. Wasn't Ahnaald going crunch up all this little schmucks into little balls and turn them into shiny new barbells?
Check out the shape of his legislative district (California #58). It's a true octopus. Precisely gerrymandered (an American term meaning the drawing of political boundaries to ensure permanent re-election of the people drawing the boundaries) down to the household to ensure that this bozo can never be voted away.
In the not-too-distant future, bozos like this will avoid tangling with the technicians in order to avoid having their slimy little scams and fiefdoms exposed on the web like this.
There seems to be a view in America that for some reason online sale of non-physical products can't be taxed in the same way as other sales, either because it's wrong in some way or impossible to police. And yet in the rest of the world it's common - in Europe you have to pay VAT on iTunes purchases just as you do on everything else.
California is so broke (runaway extremist, anti profit, tree huggers prohibiting growth and taxing everyone to death) that they have to find new and creative ways to tax it's residence to the point of total socialism because everyone there is to dumb to th think for themselves and eliminate this government nonsense.
There, I had my say!
Athiesm is a religion like not collecting stamps is a hobby.
I thought the RIAA said we don't own these songs. How can they tax us on something we don't own?
You already pay tax on the utility bill.
"There is not a large black market for these items."
Not true, there is a very large market for tobacco. In fact In some states there is a limit on how much you can buy to help curb moving tobacco around from cheaper to more expensive states.
However, it is no where near the blackmarket rate for Cannabis.
Logically, it should be legal. There is exatly no reason why someoen would be ok with tonacco and alcohol but not cannabis.
It's funny to hear people talk about peoples rights to smoke and drink, and those very same people say cannabis should be banned but give no reason that doesn't apply to the others.
really just goose stepping along to the party rhetoric without thinking.
Not surprisingly all these people are also told how to think by an old book and some guy talking about a magic sky faerie.
The Kruger Dunning explains most post on
"runaway extremist, anti profit, tree huggers prohibiting growth and taxing everyone to death"
I suppose you'd rather have air so thick you could chew it eh? L.A. has 4 times the number of automobiles that it had in the 1970's but only half the air pollution. Thanks to those "extremist tree-huggers"
Not to mention, everyone who draws power pays the utility companies. So, that's paid for already.
psmylie's dictionary: Godzillion (noun) Any number large enough to destroy Tokyo
Usenet ftw...
string.Empty();
"The government has no authority to take a cut of anything they wish" and "0% of zero & all that"
... Plus over time, they can then add new forms of data to the taxable list. Plus once its taxed, they can then choose to change the taxes over time.
... As they will then be leaking money away in more taxes, which other countries don't need to pay for the same information.
... http://news.slashdot.org/comments.pl?sid=465072&cid=22544268
They make the rules. They choose what to tax and they choose what rules to change. But this is a far bigger issue that just music downloading. They are saying they want to add a tax on downloading specific data. That would create a hell of a precedent. It opens a situation that in the long term, is far wider than just music downloads.
Up until now, countries already have tax on downloading arbitrary data, as that's effectively part of the cost of using an ISP etc... But taxing specific data, thats very different. For a start, its going to need literally a Big Brother system to monitor it all. As they need to log and then workout a charge for each and every form of data.
Also who then works out how much to charge for each form of data?
Also what competitive disadvantage does that create for Californians against other countries not using such a system?
In a global economy, such short sighted state imposed profiteering for extra tax money, is going to create a competitive disadvantage for even being based in California.
Then to appear to counter this competitive disadvantage, they can then waste millions more setting up schemes where small businesses and students get some of their data at reduced tax rates etc.. But it will fail to cover all costs incurred, as they cannot create tax breaks of sufficient detail, to cover every new startup or student situation. Plus at the same time, other government departments undermine them, as they are working on dreaming up new forms of data tax, they want to add to the list of taxable forms of data.
While some countries most likely will follow America into this new hole they are trying to dig for themselves, they will open up yet another competitive advantage for other countries who don't adopt such a system.
It shows incredible shortsightedness. They are focused on short term profits from taxes with ignorance of the wider extra costs and implications and disadvantages and on top of that, will need to spend a fortune on building a Big Brother system to manage it all.
And if they choose to build Big Brother, so much for Land Of The Free?
The more I hear, the more I am sadly convinced that Big Brother is becoming inevitable, given the kinds of personalities involved in corporations and some positions of power.
For example
There are 10 kinds of people in the world... those who understand binary and those who don't.
There is a HUGE black market for booze and tobacco.
Organized crime still heavily relies on running stolen trucks of cigarettes and booze.
The biggest demand is for packs of cigarettes with quality forgeries of tax stamps on them.
Message contains 1 attachment: spam.gif
People go download music for free precisely because of the lack of a reasonably priced alternative. iTunes is barely legitimate, which is why people use it, but if there are any price hikes, including from taxes, everyone will go straight back to file sharing.
Right now, Californians don't pay sales or use tax on ESD, this bill will change that. The company you purchase it from will collect it and you will have no choice. Your Itunes and pRon will be little bit more expensive now. Deal with it by voting.
Dang it -- you just placed the tin foil hat on my head (and I was doing soooo well today!).
FBI Agent to P2P file sharer: "You know, when you illegally download, you avoid paying your taxes. When you avoid paying your taxes, the government can't fight terrorists. You want the government to fight terrorists, don't you?"
MCSE? No, sir...I don't do Windows. Yes, I am an idealist. What's your point?
Governor Arnold Schwartzenegger is a Republican who ran on a campaign of no new taxes, so he will most likely veto it.
But then again President Bush (Sr.) also ran on the same promise and broke it.
And this is nothing new. Some years ago now there was a ballot measure to add 1 cent to the gasoline tax to fund mass transit. Now, of course, people driving cars already aren't users of mass transit and therefore don't wish to pay for it. The ballot measure was soundly defeated!
Wonder of wonders, some bright light in the tax department in Sacramento SUDDENLY DISCOVERED that, Hey, we can apply Sales Tax to gasoline, which we never did before because we already had a gasoline tax. And on top of that, we can apply Sales Tax to THE ENTIRE PRICE of a gallon of gasoline, resulting in what should never be allowed, A TAX ON A TAX!
FRUTHERMORE, Sales Tax goes into the General Fund, meaning we can SPEND IT ON ANYTHING WE LIKE including mass transit, or not. That's still in effect in California, which is one of the two reasons why CALIFORNIA HAS SOME OF THE MOST EXPENSIVE GASOLINE IN THE COUNTRY! (Hawaii at least has the excuse that they have to import all their gasoline for their prices.)
This is timely because California is at it again trying to get registered car owners to pay for mass transit. And now it's IN ADDITION to the sales tax on gasoline!!
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
The proposal is insane, since you simply can't buy music as property. Everyone knows that all you get, whether you buy a CD or download music, is a license to listen to the music.
If what you bought was actual property, we wouldn't have nearly the DRM and piracy mess as we do now. Lawmakers have to make a decision - leave it as a license and not taxable, or call it property, tax it, and let customers do whatever they like with their property after it's purchased.
Basic health care, environmental protection, police, fire protection and many other generic systems
Is paid for by the property taxes where the various pieces of equipment are located.
Education of the people working at the company
Is paid for as and end unto it self, it is a governemtn investment that pays big returns already. educated countries have massively higher GNPs than uneducated countries.
The juridical and monetary systems that make doing any business possible
I already pay for that via State and federal income taxes, I don't need to pay for it again. Besides which the monetary system I use for all my online interactions is called American Express, I have never once used the money printed by the Federal Reserve to pay for anything online.
Scientific research which forms the base of any modern technology;
That research is already a publicly owned good, because we all paid for it the first time by funding DARPA.
It's ridiculous to exempt an entire economic sector from taxes. It is stealing from people in other businesses.
no no no. It is ridiculous to tax people multiple times on the same dollar. Since we already pay income tax on every dollar we use to buy these goods and services, this is simply a case of the government stealing unevenly from different businesses. If you have to pay income tax at 30% and you buy a product with a 5% sales tax, made here in the US where half it's production cost is labor, then it's already been marked up an extra 15% to cover the income tax for the larborer and another 5% for materials sales tax and another few percent for the property taxes of the manufacturer's facility. Well we are already looking at having every dollar earned only getting us $0.50 worth of goods with the extra going to our government. Who exactly is doing the stealing here?
We are all just people.