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Mississippi Bill Would Tax Software Sales
Byzantine writes "The Mississippi Legislature has passed MS House Bill 1461 which would amend the state's tax laws specifically to charge sales tax on 'electrically transferred digital products,' including products bought via mail-order. The bill is currently on the governor's desk awaiting signature." Softpedia claims that 20 states have enacted download taxes of one sort or another — most of them for iTunes music — and that New York is considering taxing downloads of all kinds.
Because there's no "value added" by introducing a Value Added Tax.
Why should a business transaction be taxed simply because it happened? Taxes are meant to give the government the bare minimum of income necessary to conduct government business, not to punish people for spending money they received in exchange for their labor.
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If there's no incentive for people to make productive use of capital, the economy stagnates.
The incentive for people to make productive use of capital is the reward / gain they get from doing so. I'm no rabid objectivist or "big-L" libertarian, but that's just fundamental economics.
it's not fair to society to let him keep it for no/low cost when it might be put to better, more productive use for society by someone else.
Spoken like a true communist. Other than life itself, there is no more fundamental right than the right to property. From your comments I get the impression that you are not a property owner or you would not be so cavalier in taxing it away.
Reallocating property from one person to another based on "productive use of capital" for the benefit of society over the rights of the individual is always going to be a negative incentive to productivity. Why acquire property if it can just be taken away (or taxed away) at the whim of some powerful individual or group? Some property taxes are probably inevitable to pay for necessary social services (fire, police, etc.) but those taxes should never be used to penalize for some imagined lack of relative "productivity".
Unfortunately, there are others who agree with your line of reasoning, most notably some US Supreme Court justices. See Kelo v. City of New London for a real world example of the results.