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WTO May Extend E-Commerce Import Duty Moratorium
Pig Hogger writes "A meeting of World Trade Ministers would seem to propose an
18 month extension of the duty break that currently applies to cyberspace.
But the fact is, the duty break only applies to what is transmitted electronically, so therefore imposing duties on such would essentially be unenforcable by customs officials...
However, it is being proposed by the US that such a duty exemption be extended to the 'physical equivalent' of goods such as digital music and software. Can you spell MEDIA?" The story's from Fox News.
*click* *click*
I'm outside the US!
*click* *click*
Now I'm back in!
*click* *click*
Outside the US again!
What are you gonna do, tell my legions of electrons to stop at the router for an inspection? You'll find they're largely negatively charged from being spammed alot, but little else...
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Historically duties and sales taxes comes from the ancient marketplace. The sellers would pay a small fee to the market which would help to promote it and, crucially, guarantee and enforce a certain standard and a consistent set of rules for trade. (Big) Government has taken over the role as the overseer of trading standards and as the guarantoor of the order of the "marketplace". It has also taken the market tax.
However, in the internet age this approach is looking increasingly strange. I, as a consumer, can buy goods anywhere at the click of a mouse, and the government can not hope to regulate all and every market. And even if I knew the physical location of the seller (not a trivial thing) and even if the local government enforced a reasonable set of trading standards (obviously not true everywhere), it would be very difficult and expensive for me to actually seek redress in a local court.
The solution, in my opinion, is to return to the medieval market arrangement. Let us have private markets which regulate themselves, and let the consumers decide which markets to deal in. It is not a completely alien idea: most stock markets operate in this way (even if they are not exactly free from government regulation) and most of the online markets (e.g. e-bay, amazon, ...) have at least some rules and attempts at consumer protection.
The bad news for govenrment is that it will loose a lot of revenue. But it will also loose some of the responsibility (if it can ever give up power!) and therefore, presumably, costs. In the future governments will increasingly have to rely on taxing immobile value like land and buildings. Trade and people are both becoming too mobile.
Incidently the UK has a funny half-way house where I as a consumer can choose to sue my UK credit card company instead of the retailer for any disputes over a purchase. Interesting: as money become increasingly a branded commodity is this the way forward?
Hi!
Help me understand this one: I'm a Danish citizen who dials my UK ISP from Germany to read my e-mail on a Californian server (I'm not making this up!) : where "am" I, for the purpose of the law? Does it make a difference if I download the e-mail to my laptop before/after reading it?
I'm not a lawyer so I'm confused.
Hi!
Fundamentally what is a tax? A forced contribution to provide for public benefits which would be too difficult to charge for directly. E.g. laws/regulation, self-defense, public health information. etc. There are a couple of problems with taxing the internet, unlike federal roads computer networks are essentially privately owned (ignoring the academic/government bits) and (AOL/MSN/Yahoo notwithstanding) market forces have compelled players to interoperate, if only to get a slice of a larger pie.
Secondly, governments, despite their perception of gross stupidity, are not ignorant about the economic benefits of IT. Any one government that wants to put a tarriff/tax on IT traffic will find itself in a comparative disadvantage as firms immediately relocate their services offshore and land their fibre cables elsewhere. How many country towns disappeared due to newly created highways bypassing their locales?
Thirdly is what exactly is there to be taxed? Can you demand 20% of all the bits flowing along a wire? Can you have half a promise (essentially what money has now devolved to)? Much of the information that flows nowadays are transactions, or essentially bookkeeping activities between firms or internal transfers between business units of the same company. Calculating a dollar cost is a complex task. For its 10% GST impost, the Australian government tried to figure out a value-added-tax formula for financial transactions but gave up in the end.
As for juristiction, that is another whole can of worms that nobody wants to touch due to the headaches (and politics) involved. There will always be the odd-ball country that will refuse to play along (why do you think international tax havens exist?). Even if the US government unilaterally imposed the ol' greenback on the rest of the world with all the associated legal baggage, some smart cookie will find a solution to avoid confiscatory measures like establishing extra-territorial oil platforms beyond national maritine borders to host electronic services. Identities and paper corporations can be created faster than any countermeasure to crack down so it becomes a losing game. One can only look at corporations like Fox/News to see how shifting costs between countries can add extra value to the bottom-line.
As one wag used to say, he doesn't think the government is that efficient that its worth giving them more than the minimum required by law. Perhaps the only solution is to become rich then let public pressure and social stigma require individual voluntary contributions to non-profit causes.
LL