Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
×
Businesses Government Politics

California Lawmaker Proposes Music Download Tax 326

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."
This discussion has been archived. No new comments can be posted.

California Lawmaker Proposes Music Download Tax

Comments Filter:
  • by robinsonne ( 952701 ) on Tuesday April 08, 2008 @10:36AM (#23000130)
    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?
  • Wrong title (Score:5, Insightful)

    by jav1231 ( 539129 ) on Tuesday April 08, 2008 @10:37AM (#23000138)
    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.

  • by SirGarlon ( 845873 ) on Tuesday April 08, 2008 @10:42AM (#23000222)
    Or, it encourages digital publishers to re-locate out of state.
  • by ThosLives ( 686517 ) on Tuesday April 08, 2008 @10:42AM (#23000230) Journal

    On a related note: If I was in California, I'd ask this congressman what benefit I as an individual and California as a whole would receive for the increased revenue. Would I get more use of my product? Would the money be used to increase pay for congressmen? Would it offset some other tax? Without knowing those things, and also having compensation in the language of the bill for what happens if those funds are not used for the approved task, the increase should be disallowed. On behalf of everyone who wishes to avoid California setting precedent, please write your representatives!

    I personally don't mind taxes as long as there is a clear benefit for the additional cost. When taxes increase with no increase in benefit, there's a problem.

  • by unlametheweak ( 1102159 ) on Tuesday April 08, 2008 @10:44AM (#23000252)

    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?
    No. You don't get to own the music, and you don't get to own the license to listen to the music. You don't get to own anything. What you do get when "purchasing" a song is the right to listen to it whenever the license agreement and DRM software says you can.

    You get what you pay for.
    Buyer beware.
  • by Psmylie ( 169236 ) * on Tuesday April 08, 2008 @10:44AM (#23000258) Homepage
    "The government has no authority to take a cut of anything they wish."

    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.

  • by IBBoard ( 1128019 ) on Tuesday April 08, 2008 @10:44AM (#23000260) Homepage
    It's a bit of a dubious definition for a collection of 1s and 0s:

    1 capable of being touched; discernible by the touch; material or substantial.
    2. real or actual, rather than imaginary or visionary: the tangible benefits of sunshine.
    3. definite; not vague or elusive: no tangible grounds for suspicion.
    4. (of an asset) having actual physical existence, as real estate or chattels, and therefore capable of being assigned a value in monetary terms.


    Music files aren't tangible in the sense of the bold sections, but they are tangible in the sense of the italic section. However, the italic section is preceded by "therefore" and so it is an implied feature rather than a stand alone definition. It wouldn't surprise me if he was bending that last bit, though.

    As well as going near it with a magnet (since someone could argue that you go near a bookshelf with a flame and you won't have it any more) the other difference is copying. You can't make a perfect copy of a car/CD/book without physical materials, and it's never perfect. Music files, being binary, are perfectly cloned and don't need any raw materials. I think that should be an obvious enough distinction between the two in terms of "tangible property" even if you do ignore "well I can't touch the file on my disk".
  • by L4t3r4lu5 ( 1216702 ) on Tuesday April 08, 2008 @10:45AM (#23000270)
    ... 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"
  • by Maxo-Texas ( 864189 ) on Tuesday April 08, 2008 @10:46AM (#23000274)
    Two points

    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 .008 cents).
  • Re:Hmmmm ... (Score:5, Insightful)

    by Archangel Michael ( 180766 ) on Tuesday April 08, 2008 @10:53AM (#23000358) Journal
    "Hopefully, someone can slap some sense into him."

    What the hell are you thinking, man? He a freaking politician.
  • Re:Hmmmm ... (Score:5, Insightful)

    by JustinOpinion ( 1246824 ) on Tuesday April 08, 2008 @10:55AM (#23000408)

    They think people are gonna pay tax on all that free porn they're pulling off (ahem) the internet?
    (emphasis added)
    According to TFA, it would be a tax on the sale price:

    If Calderon prevails, the 8.25 to 8.75 percent sales-tax rates in effect in most of the Bay Area would raise the cost of that 99-cent download to $1.07 or $1.08.
    So, presumably, free porn wouldn't be taxed at all--but you would have to pay tax on any porn you purchase online.

    This is interesting because if it's a sales tax, it won't apply to freely distributed intellectual works, like creative commons music. So if all my music downloads are free, I don't have to pay any tax. Presuming that they don't start taxing donations, this would actually make the creative commons business model (release for free, capitalize on donations, concerts, merchandise, etc.) even more compelling (for artist and consumer).

    That having been said, this overall sounds like a terrible idea. We need less monetization of intellectual works, not more.
  • by LunaticTippy ( 872397 ) on Tuesday April 08, 2008 @11:09AM (#23000584)
    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.
  • by Shivetya ( 243324 ) on Tuesday April 08, 2008 @11:16AM (#23000662) Homepage Journal
    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.
  • by tjstork ( 137384 ) <todd DOT bandrowsky AT gmail DOT com> on Tuesday April 08, 2008 @11:20AM (#23000712) Homepage Journal
    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?

  • by jesterpilot ( 906386 ) on Tuesday April 08, 2008 @11:20AM (#23000718) Homepage

    The entire cost is borne by ISPs and the site you download from How about
    • Education of the people working at the company;
    • The juridical and monetary systems that make doing any business possible;
    • Scientific research which forms the base of any modern technology;
    • Basic health care, environmental protection, police, fire protection and many other generic systems that give people the possibility to be a customer instead of a hunter-gatherer?
    It's ridiculous to exempt an entire economic sector from taxes. It is stealing from people in other businesses.
  • by boris111 ( 837756 ) on Tuesday April 08, 2008 @11:21AM (#23000732)
    So what you're saying is CA plans to subsidize our internet connections... sweet!
  • by eln ( 21727 ) on Tuesday April 08, 2008 @11:23AM (#23000756)
    What about the cost to build the electrical infrastructure to bring power to the ISP's servers? Or the taxpayer-subsidized telecom infrastructure that provides the bandwidth required to deliver the music to your PC?
  • by megaditto ( 982598 ) on Tuesday April 08, 2008 @11:26AM (#23000790)
    Silly rabbit. State or Federal Government has no constitutional right to grant personal rights of any kind. They are limited to taking your rights and your property away from you...
  • by Simonetta ( 207550 ) on Tuesday April 08, 2008 @11:28AM (#23000806)
    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.
  • by moderatorrater ( 1095745 ) on Tuesday April 08, 2008 @11:30AM (#23000836)

    So to sum it up, he wants to tax information.
    But we've been doing this for a long time now. DVDs, CDs, and books are nothing more than information with some packaging that cost much, much less than the information they hold.

    Or, to flip it around, you could just as easily say that they're not taxing the information, they're taxing the actual, physical signals that iTunes is sending you.
  • by iminplaya ( 723125 ) on Tuesday April 08, 2008 @11:33AM (#23000888) Journal
    To sum it up, he wants to tax everything. Such is the nature of the bureaucrat.
  • by Stopher2475 ( 780930 ) on Tuesday April 08, 2008 @12:13PM (#23001470)
    I thought the RIAA said we don't own these songs. How can they tax us on something we don't own?
  • by geekoid ( 135745 ) <dadinportland&yahoo,com> on Tuesday April 08, 2008 @12:16PM (#23001502) Homepage Journal
    "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.

  • by NiceGeek ( 126629 ) on Tuesday April 08, 2008 @12:23PM (#23001582)
    "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"
  • by MindKata ( 957167 ) on Tuesday April 08, 2008 @12:53PM (#23001994) Journal
    "The government has no authority to take a cut of anything they wish" and "0% of zero & all that"

    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? ... 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.

    Also what competitive disadvantage does that create for Californians against other countries not using such a system? ... As they will then be leaking money away in more taxes, which other countries don't need to pay for the same information.

    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 ... http://news.slashdot.org/comments.pl?sid=465072&cid=22544268 [slashdot.org]
  • by DannyO152 ( 544940 ) on Tuesday April 08, 2008 @12:54PM (#23002018)

    In California, sales taxes are paid on leased and rented equipment. So, no, ownership is not a key concept. You pay sales tax on a can of beer, so, no, permanence is not a key concept. Tangible means it takes real form. I move your sofa for $10 and there's no sales tax, because you did not gain any tangible good for my sale (of a service). You give me $10 a month and I tell you the important news of the day on demand: a service, not tangible, no sales tax. You give me $10 a month and I deliver a newspaper to your door every day: tangible and taxable.

    It used to be that when a photographer was hired, they charged for the photography as a non-taxable service and then charged a cost for limited licensing rights for each print or transparency and this was sales taxed. (If the transparencies were part of the fee, i.e., 1/2 day of photography with assistant plus three transparencies and a limited license to use them, the entire contract amount was sales taxed.) That was because the transparencies are clearly tangible. Nowadays, photographers transfer electronically the digital version of the photos and are not charging sales tax because sales tax law was not written in anticipation of the digital world. Music, movies, software, books are now sold and the buyer receives digital media whereas before they received a physical item. Obviously, any mass consumer item that may be distributed electronically will be because the costs of distribution are so advantageous.

    I give somebody money and I get something that I load into a device and I hear music. Is it really apples and oranges to say the principle that applied to vinyl disk and turntable should apply to mp3 download and iPod? I say no and I think a sales tax on electronically distributed goods such as books, music, movies, etc., should happen. It would be real nice if in return for our taxes we could get equivalent usage rights for that digital file and that disk, but here we run into state commercial law vs. Federal copyright law and Hollywood owns both California and the U.S.

  • by photomonkey ( 987563 ) on Tuesday April 08, 2008 @12:59PM (#23002088)

    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.

  • by Reziac ( 43301 ) * on Tuesday April 08, 2008 @01:02PM (#23002148) Homepage Journal
    "That is the point of the bill this guy is proposing. He wants to update it from tangible to include information."

    That's a scary concept. It could be extended to *any* access of information. Imagine being charged a "use tax" every time you read a book.

  • by Anonymous Coward on Tuesday April 08, 2008 @03:41PM (#23004318)
    Except the way things operate these days. The ninths and tenth man have a deal with the bar. Say the top 2 men tip the bartender and the bartender decides that 3 nights out of the 5 their $77 share would be reduces to $10 to keep them coming back. Sure the first 4 men will always get off free but the middle drinkers (middle class) will always end up paying more.

    9th and 10th men total: $77 * 5 = $385
    Reimbursement to both for 3 out of 5 days = $385 - (3 * $77) = $154

    So now instead of paying $77 a night they are only paying collectively $30. Now if you split it up between the 9th and 10th man it is

    9th man = $7 (38% reduction)
    10th man = $23 (38% reduction)

    So now the 9th man is paying the same as the 7th man. The 10th man is paying only $9 more. It appears the the 9th man is coming out the best of any paying customer and that the 7th and 8th man is getting it the worst.

    Over simplification but we treat the top guys the best in tax breaks and subsidies. Now imagine of the 10th man was represented by a corporation.
  • by eagl ( 86459 ) on Tuesday April 08, 2008 @04:35PM (#23004982) Journal
    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.
  • by Original Replica ( 908688 ) on Tuesday April 08, 2008 @05:52PM (#23005896) Journal
    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?
  • by Qzukk ( 229616 ) on Tuesday April 08, 2008 @08:00PM (#23007038) Journal
    anybody that thinks democrats are the answer to republicans is as rational as preferring to be stabbed in the back vs stabbed to your face - you still end up stabbed.

    The problem is that people come in two flavors: those that don't want to see it coming, and those that do.

Make sure your code does nothing gracefully.

Working...