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Why a Music Tax Is a Bad Idea
An anonymous reader writes with a followup to the story posted last week about Warner Music's plan for a music tax for universities. "There's been some debate about this plan and Techdirt has a detailed explanation of why a music tax is a bad idea, noting that it effectively rewards those who failed in the marketplace, punishes those who innovated and sets up a huge, inefficient and unnecessary bureaucracy. Meanwhile, plenty of musicians who are experimenting with new business models are finding that they can make more money and appeal to more fans. So, why stymie that process with a new bureaucracy that simply funds the big record labels?"
So, why stymie that process with a new bureaucracy that simply funds the big record labels?
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Profit???
At the very least campaign contributions?
So, why stymie that process with a new bureaucracy that simply funds the big record labels?
I think you've answered your own question. Warner Music isn't proposing this for your benefit.
Extortion rather than bailout.
It taxes (more like fines) those who did nothing wrong.
The music tax will be based on how much music is currently being shared online. Do you expect the amount to stay static, after it's legalized?
Of course not. All of a sudden, how to download music will be on the news. People will make lots of money helping the technology-illiterate use file sharing. Everyone will file share music, because they're being taxed for it anyway. Music file sharing will go through the roof, and profits will drop lower than they knew was possible. That's when the tax will start going up.
Second Issue. All you file sharers out there: how often do you download a whole discography, when you only really want 5 songs tops? Exactly. That whole discography is going to count towards that artist's share of the tax. People do a lot of things out of laziness when it's free.
Third issue. Do you think it will stop at a music tax? Next the MPAA will be clamoring for a movie tax, and there'll be moves for a different fee for everything in existence: a video game tax, a tv show tax, a pornography tax, a sewing kit tax, etc. Once you open that box, it's not going to close again.
After they get the music tax, you know they're going to go after a movie tax, a tv series tax, a game tax and an ebook tax.
None of them can see the clouds; The polished wings don't care.
Warner is proceeding under the assumption that if they apply their big guns to this, they will get it pushed through. Especially for those colleges that would rather roll over and pass the bill to the students than fight for their rights. If I were a big music exec, I'd be doing the same thing. It's free money, even if only a handful of schools agree.
What burns me about it is that it's obviously a money grab, and it's so blatantly immoral it kills me that it's reached this level of attention. First off, why Warner? Why do they get the money? Second off, I'm a musician on the side, and I put out albums on a regular basis which make money here on a local level. If my band's album is downloaded on a college campus, is some of that tax going to go to me, if I have no affiliation with Warner? NO! So not only are they getting money for music that may or may not even be downloaded, they're getting money for content that isn't even theirs to profit on.
It's my opinion that the music industry has an standing policy of "do everything you think you can get away with", which, when combined with the more venerated "better to ask for forgiveness than permission" puts them in the frame of mind to do this. And if they get away with it, even a little bit, they're making money. For those lamenting that these guys are clinging to a dying business model, wake up and look around. This is the new business model! Use your clout and presence to try and get as much free money as you can, while doing damage control on the other side to stem any repercussions from less than moral practices. If you had millions of dollars to throw into a system like this to "prime the pump" so to speak, and you valued a quick buck over scruples, why the hell wouldn't you try to pull something like this? /soapbox
Raging in an online forum won't do anything for the world around you. To see change, you must take action.
This is just a fancy way of the music industry trying to hook up an IV drip tube to everybody's credit card account. It is like Netflix, but with music.
My first problem with this is that the music industry is only interested in promoting big-hit mass-market stuff that applies to the lowest common denominator. Excuse me, but I don't want to give my money to Britney Spears.
My second problem is that I want to be able to opt out of paying for more than I use.
My third problem is that a structure like this gives the music industry too much leverage in the internet world, and I prefer a free internet.
Never, I say!
So the bigger "why" is this: Why can't we just agree that taxes in general are a bad thing? It's not just the music tax that would be bad, it's almost all of them. Of course some very minimal taxes are necessary to build just enough government to protect our freedoms from anarchy and external threats, and to provide for a very few public goods like roads, but otherwise taxes are bad. Any time you take money in the form of taxes, you are taking money out of the economy that could have been used productively, and giving it to government which, without the pressure of market forces, is not going to have any incentive to use those resources in an optimal way.
And for those who are skeptical, I think I need to go no further for an example than to point to President Elect Obama's appointments for cabinet and agency heads. It's not the "who is appointed" that matters, it's the how freakin' many are appointed. Seriously, its like he's appointed three or four cabinet or agency heads a day for the past month! We started out this country with only three secretaries. Are all these cabinet positions actually providing a service? You've got the department of energy with nearly 30 billion dollars, a department that was created by Jimmy Carter to help us achieve energy security and independence. Obviously that didn't happen, and in fact we've gone the opposite direction, so what exactly are they doing over there with all those billions? Then you have the department of education (also created by da man Jimmy Carter) with what, 60 billion a year? They are supposed to ensure our children have a good education, yet we spend more money per capita on students than anywhere in the world and have some of the worst results of any industrialized nation. What in the world are they doing over there with all that money, besides handing large sums directly to the teachers unions?
I think you see my point. You can go right down the list... secretary of health and human services, secretary of housing and urban development (that's been a real bright spot of success, right?), secretary of agriculture, secretary of labor, secretary of veterans affairs (we need a whole cabinet branch for this?), etc. We've taken hundreds of billions, if not trillions, of dollars out of the economy annually through taxes and given it to these guys. Is that productive, especially in comparison to letting that money drive growth in our economy, which raises the prosperity of every single citizen?
Taxes are a bad thing... they simply allow the bureaucracy to expand to meet the needs of the expanding bureaucracy. I think Dave Ramsey said it best when he said that the economy is a wild, powerful dog, happy and free. And the government and its taxes are a tick on the backside of that dog. A tick that, in some of the more productive sectors of our economy, is easily 40% of the size of the dog!
Beware of bugs in the above code; I have only proved it correct, not tried it.