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NY Bill Proposes Tax Credit for Open Source Developers
NewYorkCountryLawyer writes "Assemblymen Jonathan Bing and Micah Kellner, along with a number of co-sponsors, have introduced proposed legislation in New York State which would grant a tax credit to individuals acting as volunteers who develop open source programs. The idea of the credit is to ensure that volunteer developers, who could not otherwise deduct their expenses because they are not part of a 'business,' should nevertheless be able to receive a tax benefit for their contribution. The credit would be for 20% of the expenses incurred, up to $200. The preamble to the bill notes that the New York State Assembly itself currently uses 'Open Source programs such as Mozilla for email, Firefox for web browsing, and WebCal for electronic calendars,' and that these programs have led to significant cost savings to taxpayers. The preamble also cited a 2006 report authored by John Irons and Carl Malamud from the Center for American Progress detailing how Open Source software enhances a broader dissemination of knowledge and ideas."
It's great because while you can generally deduct your expenses from your income, if you are contributing to free software code, by definition you are not making any money.
An alternative of course is to join a fair project instead (warning: shameless plug - you have been warned). Think of it like open source, except that if someone makes money with the resulting software , that person owes a fair share back to the developers.
$200 is too low. I want to be able to deduct my MacBook Pro. But hey, New York is leading the way. Anyone knows if this has a chance to pass?
The idea sounds excellent in principle, but how do you tell a true open source developer apart from a poser looking to abuse this program?
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Instead, commission some FOSS or features added to FOSS you already use; the money directly supports useful development and the developer(s) involved, the taxpayer, and the entire world (well, that uses that software, directly or indirectly...)
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Didn't Al Gore propose a similar tax program?
This is the result of capitalism, lol. Doing just enough to get money.
WORKING AS INTENDED.
I think now is a good time to have some public discussion of what it will mean if big companies can essentially make money by making their code open. Would Sun have open sourced Java sooner if we were going to pay them to do it? Will it mean a healthier open source community? Will it encourage hardware vendors to go further for the Linux community than just giving us BLOBs?
20% up to $200.00? Guess what. My hourly rate is $200,000. That works out pretty well.
(this joke goes out to my old teacher Mrs. Lett, who taught me that "x is n percent of y" equates to x = n% * y, thus y = x / n%)
Sure, people may be living by the fundamentals of capitalism (maximising their own gain) but I don't think the system was ever intended to include an all powerful thief who steals money and then redistributes it to some people arbitrarily, keeping a big chunk for himself as payment for his wonderful services.
This is a nice thought but $200 is nothing... that's chump change.
How much do we miss, as individual developers, when compared to corporations who get R&D tax credits, etc?
Obviously anyone getting paid via a W-2 gets very, very screwed. But for those getting paid via 1099, what can they do to recoup their investments in development that may or may not ultimately prove commercially viable? Etc.
If you want to help open source, require that government software makes widespread use of open specifications. The rest will pay for itself.
Anyone who is even remotely related to FOSS systems could claim the $200 tax credit. How about small grants for making open source contributions, with milestone requirements.
Great. Just great.
This is effectively an open source government subsidy, albeit a small one.
Government subsidies generally are used to either (a) encourage a behavior (mortgate interest deducture designed to encourage home ownership, for example, though what it really does is raise home prices), or (b) create a claim to that subsidiesd, in hopes of exploiting it later, which is likely the case here.
IOW, "You could not have developed this code if the taxpayer did not subsidize it, therefore the taxpayer owns it, not you, and you now have to pay a $50/year tax to use it. Obviously, since you did not own it, you could not copyright it, and the GPL is null and void, except where we say otherwise. If you need further convincing, we will just apply the doctrine of eminent domain to own it."
Basically, the government creates the slimest of justifications for an ownership interest in something, on terms likely never acceptable in a free market, and the uses it's force to exploit that supposed ownership interest.
I'd expect that RMS might actually like this, but I also think he is a bit naive about how evil and incompetent governments can be.
He supports universal healthcare, for example, but can not accept that it's general failure is due to a design and not implementation flaw.
In Liberty, Rene
To the mod... perfectly on topic. Let me break it down slowly for you. We have various agencies offering tax breaks and increased spending to help the economy. The reality is that spending Trillions more than you bring in may help short-term. However, long term we have to work harder just to pay the debt we owe everyone.
Now, if Mr. Smith not receiving any benefit from the overspending, he rightly goes "Hey, it isn't right to put me into debt so you can benefit". But, throw him a bone, and suddenly he is content with the overspending and gladly puts the ring through his nose.
Fast forward a generation, and the bill catches up with us. We spend more time just to pay off old debts, and less for investing in the future. Countries who lent us the money have more to spend on capital projects. Soon we are a 2nd world country.
It is already happening. And seeing the collective orgasm over a $200 credit illustrates it beautifully.
Bottom line: tax cuts are nice. But you have to pay for them. Either now. Or later.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
What if people make software like "Hello World v5" or "My First For Loop v2.1" just for the tax credit?
And don't tell me it requires LOC counts or a certain team size or number of downloads or user base. Because I'm sure that people wanting a tax credit wouldn't mind teaming up...
Sure it's a small number, but it's a beginning. What's important are the principles -- the recognition that open source (a) contributes to the growth of ideas, (b) makes our economy more efficient, (c) helps both industry and government improve the services they provide, and (d) should be encouraged.
Ray Beckerman +5 Insightful
Actually, that is completely backwards. A capitalist economy requires a powerful government to keep order. If you get rid of the government one of two things happens. You either have people doing some really terrible things to each other, or you develop communes. Usually both, with the former prevailing.
I love open source, that way I never pay for software or ever pay programmers. I just give them a big ego boost and tell them how great they are and how they are helping the world. True open sourcers don't ask for tax breaks. Cause that would be like working for the man.
So you're saying capitalist theory was developed without considering the existence of governments? Well that would explain why it feels so disconnected from reality sometimes. That'd be like me developing a plan for getting to work that doesn't account for terrain or solid objects in my way.
The enemies of Democracy are
By the way, for those of you anxious to know the background of how an Assemblyman named Jonathan Bing got into this issue, I should mention that
(a) the guy with the idea behind this bill was "open government", "open access to court records", "open source", "open everything" activist Carl Malamud, who was most recently in the news when Congressmen and Senators started picking up his thread about making PACER -- i.e. court records -- free (as in beer); and
(b) the guy who helped usher this through, and put together the details, and get the Assemblymen to put their backs behind this, in the halls of government, is a very dynamic young geek and Slashdotter named Benjamin Kallos (like myself a Bronx High School of Science grad) who until recently was working for Assemblyman Bing but is now running for City Council in Manhattan.
Ray Beckerman +5 Insightful
Keep the money out of it. The open source system is already working. Any additional legislation, no matter how well intended, has consequences. If nothing else, government officials have to spend their time administering that legislation. Only when the benefits outweigh the consequences should legislation be introduced.
This kind of legislation only has the potential to harm the open source movement.
Currently, the benefit of this extra legislation is a pittance, a mere $200. This is nothing more than a token gesture. It's intended as an extra incentive for individuals to contribute, but gives no real relief to any project large enough to make a difference.
So it has barely any benefit, and it has a chance to do a lot of harm.
The little harms: It can be abused too easily. There's very little way to keep proper track. The money would be diverted from other public benefit.
The big harms: 1) incentives have been shown to psychologically stifle altruistic endeavours and 2) possible large scale abuse later.
1) The incentive
This kind of incentive actually does a lot more harm than good. Barry Schwartz talks about it briefly in one of his TED talks. (at 10min 50sec).
"If you have a reason for doing something and I give you a second reason, it seems only logical that 2 reasons are better than one and you're more likely to do it. Right? Well, not always..." He gives an example of something I've heard about time and time again. If people are willing to do something based on principle for what they believe is right, they are less likely to do it if they are also offered an incentive of money. The introduction of the incentive switches the psychological focus from, 'How can I help?' to 'What can I get out of it?' Without the incentive we're willing to deal with difficulties for a community or a cause we think is right. With the incentive, we weigh the difficulties with what we're getting out of it.
2) Abuse
If legislation grabs hold in one place, that makes it easier for similar legislation to come about in other places. This can have a snowball effect until it gets rather large. So right now you'd have a few individuals abusing the system, but if more legislation gets passed and more money added, you'd get large corporations abusing the system. What happens when the the next OOXML (a product owned by a large company but passed off as being the same as any other OSS) comes into play? It'll just be another government kickback to be abused. Don't assume government legislation is going to be tech savvy as to what true FOSS is.
OSS is doing fine now. It's not broken. It doesn't need fixing. There is already legislation helping non-profit organizations. This kind of legislation does not provide any real benefit. It is too easy to abuse now and it psychologically harms the motivations of the OSS movement.
Let's leave the money in OSS to donations and deals with ordinary companies. Adding extra governmental layers of money is just a bad idea.
Governments and executive management needs to go on a economic diet. However like all diets, we go off of them for various reasons and go back to our "bad" ways.
Government and executives need to reduce own personal expenses so they can live within income they get.
And so the progress of socialism and communism in America continues unabated.
I'd rather see the government push to get the open source software used in schools and government offices as well as a push for these institutions to use open source formats which will help push people into using it and in the end that will be worth much more than a cheque for $200.
Soon we are a 2nd world country.
Soon we'll be part of the USSR?
http://en.wikipedia.org/wiki/Second_World
It is by my will alone my thoughts acquire motion; it is by the juice of the coffee bean that the thoughts acquire speed
If, as you say, the tax breaks and increased spending actually do help, then, by definition, more wealth has been created than otherwise would have existed with which to pay off the debt. That's the whole theory behind accepting short-term and potentially very significant increases in debt load (proportional to GDP) during a recession (not willy-nilly, but with targeted policies designed to reduce the impact of and reverse the downturn) while working out of the debt load during expansions. The problems generally are (1) proper targeting of stimulus policy during recessions (which is a comparatively minor problem in practice; while it can be done very badly, usually it is done in a way which is a net benefit even if it could be improved), and, particularly recently, (2) maintaining the discipline to work debt loads down during expansions.
#2 is the big problem, and its not a problem that has always existed and that shows you just can't trust politicians; US national debt-to-GDP ratio was managed well from the end of WWII through the 1970s, working down pretty consistently, with occasional short-term increases; exactly what you'd expect from responsible fiscal policy. In the 1980s under Reagan and Bush I it exploded -- not only during the recessionary periods, but during the expansionary periods in between, as well. Under Clinton the growth of the debt compared to the GDP was slowed and reversed, buy it grew again under Bush II, not just during the short recession at the beginning of his term and the longer one at the end, but through the expansion in the middle as well (to be fair to Bush the Younger, the debt increase in his term was at nothing like the rate under Reagan and Bush the Elder.)
(OTOH, its worth noting that, despite all the hyperventilating about the size of the national debt now, its currently a little over half the share of GDP it was when it peaked in the 1940s; while we certainly need to get better discipline about working it down during expansions, the apocalyptic portrayals of unprecedent runaway debt are misleading.)
If they are saving all this money, why do my NYS state tax go up? Why does this state have the most expesive state goverment of the all of the 50 states??
Analogy Time by a great American:
"Think of a poker game. Eventually someone wins and has all of the money. If the other players want to stay in then they need to borrow money to do it."
This is basically how capitalism works. Except that if someone winds up with all the money then we go into a depression and everyone suffers.
Is this really what you want?
I write open source drivers for the Linux Kernel and I live in New York City. I've easily spent a thousand bucks in the last year buying hardware I didn't need so I could make it under Linux work.
People might think the $200 is a token gesture, but for me it's real money. It's another two or three devices I could add support for.
It will lead to the government defining Open Source.
"I'm from the Government. I'm here to help you."
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
With all of the chatter about the merits and viability of the tax credit, I'm surprised at the lack of comment on the preamble. Regardless whether the proposed legislation makes it, as a resident of NYS, I'm really encouraged to hear that the Assembly "Gets It" when it comes to *using* OSS. That's not "proposed" -- they've already made OSS a significant part of how they get things done. This is a *huge* win in mindset, and will have positive effects (even indirect ones) beyond any small tax credit.
--
It must be bunnies.
Tax levels and credits in an ideal democracy represent how much the society values various things. Carbon taxes with open source credits mean they don't like C02 in the atmosphere but like Linux. So yes, taxes on the whole should be increased to curb foreign lending, but that doesn't take away from legitimate shifts in a value for something like open source programming.
does that ring a bell?
(a) the guy with the idea behind this bill was "open government", "open access to court records", "open source", "open everything" activist Carl Malamud, who was most recently in the news when Congressmen and Senators started picking up his thread about making PACER -- i.e. court records -- free (as in beer); and
Also, it should probably be noted that Carl Malamud is informally campaigning to be nominated as Public Printer of the United States.
We don't need $200 spread around to 10,000 people, we need $2,000,000 concentrated on funding a few good developers to pay full-time attention to whatever FOSS project the government itself needs.
Paraphrasing the wonderful Iron Man movie script, "That's the way Dad did it, that's the way the Internet does it ... and it's worked out pretty good so far."
How about funding the full-time development of an open, transparent, computer-assisted voting system for a start? That might could help.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday