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Businesses Media Music The Almighty Buck The Internet Your Rights Online

Canada May Tax Legal Music Downloads 246

FuriousBalancing writes "MacNN is reporting that Canadians may soon pay a small tax on every legal music store download. This fee is the work of a measure proposed by the Copyright Board of Canada. About two cents would be added to every song downloaded, with 1.5 cents being added to album downloads. Streaming services and subscriptions would also be taxed, to the tune of about 6% of the monthly fee. Most interesting - the tax would be retroactively applied to every transaction processed since 1996. 'The surcharge would help compensate artists for piracy, according to SOCAN's reasoning. The publishing group draws similarities between this and a 21-cent fee already applied to blank CDs in the country; the right to copy a song from an online store demands the same sort of levy applied to copying a retail CD, SOCAN argues. The tax may have a significant impact for online stores such as iTunes and Canada-based Puretracks, which will have to factor the amount both into future and past sales.' The full text of the measure is available in PDF format."
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Canada May Tax Legal Music Downloads

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  • WTF? (Score:5, Insightful)

    by rm999 ( 775449 ) on Saturday October 20, 2007 @09:45PM (#21059563)
    "The surcharge would help compensate artists for piracy"

    So now we are taxing law-abiding citizens to make up for those who break the law? Is it just me, or does this *promote* piracy?
  • That would suck (Score:5, Insightful)

    by CastrTroy ( 595695 ) on Saturday October 20, 2007 @09:48PM (#21059583)
    If they started implementing this, I would probably just have to stop buying music altogether. It's getting way too annoying for me to buy music without being ripped off by the industry. I use eMusic to buy my music, and if I had to pay this extra fee, I would cancel my account, and let them know exactly why. If enough online music stores had enough customers quit, then I think that the backlash from these companies would make the government change their mind about this kind of stuff. Also, trying to make things like this retroactive, would make it even worse. The industry complains that people are pirating music, and then hits their customers with crap like this. I've gone completely legit for the last few years, because I feel that it's right to support the artists, but stuff like this makes me want to go back to downloading everything over IRC. If they are just going to assume that we are pirating all their content, we might as well do it, because they certainly don't deserve our money.
  • Re:WTF? (Score:3, Insightful)

    by I_lost_on_jeopardy ( 1177101 ) on Saturday October 20, 2007 @09:49PM (#21059585)

    So now we are taxing law-abiding citizens to make up for those who break the law? Is it just me, or does this *promote* piracy?
    It's the same "punish the actual customer" attitude that's resulted in anti-piracy previews in the movie theater.
  • Re:WTF? (Score:1, Insightful)

    by monkaru ( 927718 ) on Saturday October 20, 2007 @09:51PM (#21059593)
    Does nothing of the sort and only raqtionalises the already existing media levy. I doubt retroactive payment can be applied as the Charter and the Supreme Court frown on that sort of thing. Nevertheless, it isn't that big of a deal either way. Awkward at the begining I suppose. When a Canadian downloads a music file and burns it to media which has had the media levy paid it is NOT piracy but legal copying.
  • Re:WTF? (Score:5, Insightful)

    by rsmith-mac ( 639075 ) on Saturday October 20, 2007 @09:52PM (#21059599)

    It doesn't even immediately make sense. Until very recently major label music was DRM'd, which effectively prevented most casual piracy. I could potentially see streaming radio used as a piracy source, but that's only for MP3 streams, and then those guys do a number of things to discourage piracy.

    Is there something I'm missing here? How can you tax someone for piracy when they're unable to use the taxed items to reasonably commit it?

  • by QuietLagoon ( 813062 ) on Saturday October 20, 2007 @09:55PM (#21059611)
    The surcharge would help compensate artists for piracy, according to SOCAN's reasoning. The publishing group draws similarities between this and a 21-cent fee already applied to blank CDs in the country

    Has anyone ever followed up to see just how much of the 21-cent fee actually makes it back to the artists, and how much is sucked up by the record company cartel?

  • Except . . . (Score:5, Insightful)

    by SquareOfS ( 578820 ) on Saturday October 20, 2007 @09:58PM (#21059625)
    The analogy is to the levy on blank CDs? The tax is because the downloaded music can be burned to a blank CD on which you've already paid a tax because you might burn music to it?

    In related news, Canada proposed a tax on blank paper, by analogy to the sales tax which applies to books. "Someone might read what's written on the paper someday, and we won't then have the opportunity to collect the tax."

  • What other taxes? (Score:4, Insightful)

    by mkiwi ( 585287 ) on Saturday October 20, 2007 @10:22PM (#21059723)

    [sarcasm]Will there be a Tax on earbuds too? How about we have a per child tax of $50/year to account for music piracy, starting from birth, of course.[/sarcasm]

    What is this crap? Canada needs to get their priorities in order. People are more important than lobbyist groups. I hope Canadians are voting for the right politicians, because if this continues any industry could just come up and say "People are downloading/using our material illegally, we need to be compensated." Poof, another tax! With so many copies of Windows pirated, I'm surprised that Microsoft hasn't been trying to get a piece of this cake.

  • by Charles Dodgeson ( 248492 ) * <jeffrey@goldmark.org> on Saturday October 20, 2007 @10:33PM (#21059775) Homepage Journal
    ... but more evil.

    The music industry is trying to come to terms with the fact that they can't make money the way that they used to. Seeing that their traditional business model is approaching collapse, they need to either protect it or find a new business model. In this case the new business model is to get the government to tax citizens and give the tax revenue to the music industry. By encouraging more piracy, they will be able to demand more tax payer money down the road.

    If you think that this is an implausible business model, just look the business of agriculture in most rich countries. Their business is to depend on government enforced price supports and subsidies, and very little about actual farming.
  • by seanthenerd ( 678349 ) on Saturday October 20, 2007 @10:45PM (#21059837) Journal
    So until now, we could assume that when we bought music from iTunes et al., a certain amount went to that company and a certain amount went to the artist. According to a record-producing-artist friend of mine, he actually gets a very decent cut as an indie artist with iTunes (especially considering the lack of material+hosting costs). Now, with this tax (considering that it goes to SOCAN, I'm not sure if that is even the right word), iTunes will get the same cut, SOCAN will get 3% or so, and the artist will get the rest - which is less going to the artist than before (assuming that iTunes doesn't up their prices, but if they do, the same holds true because less people will buy, meaning still less for the artists.) By applying this, isn't SOCAN stealing from the artists?! As in *money* stealing. SOCAN is supposed to represent Canadian artists (by collecting radio royalties and so forth). How on earth does this help their members?! Ludricrous.

    It would be comparable, I guess, to SOCAN collecting a tax on CD purchases. The whole beauty of internet distribution is getting rid of (or reducing the number of) middlemen. This is destroying every incentive people have to *support the artist*, which seems completely against what the whole point of SOCAN was. So if I make a band and sell my music using paypal, do I have to write cheques giving 3% of my profits to SOCAN? What am I getting from them? How does this help the artists? How does this help the industry? *

    Down with middlemen.

    * "While no public responses have been made, the Copyright Board report notes that both Apple and the RIAA-equivalent Canadian Recording Industry Association were heavily involved in resisting proposed rates."

    So even the CRIA's against it. Who the heck is SOCAN representing?
  • by Jugalator ( 259273 ) on Saturday October 20, 2007 @10:51PM (#21059879) Journal
    So you get taxed for not supporting the music industry if you do support the music industry?
    And you don't get taxed for not supporting the musics industry if you don't support the music industry?

    Yes, this makes perfect sense! Thanks for this proposal.
    I wholeheartedly support it. I can now much easier choose my proper action here and whether I should purchase legal music or not.
  • Re:WTF? (Score:2, Insightful)

    by monkaru ( 927718 ) on Saturday October 20, 2007 @11:10PM (#21059955)
    The thing is no one is stealing or breaking any laws to begin with. In Canada it is legal to post files to and retrieve files from a shared directory. It is also legal to copy music to levied media. Finally, it is not illegal to download music for personal use. The use of the word piracy by the Copyright Board spokesperson was unfortunate and misleading.
  • by metoc ( 224422 ) on Saturday October 20, 2007 @11:10PM (#21059957)
    Although I am no fan of SOCAN, this definitely sticks it to the record companies. As long as these fees are in place, music piracy will remain untested in court. The current theory is that as long as the artists are compensated for illegally obtained music (aka burning a copy for you friends) they are not loosing anything when piracy happens. This reduces the real losses to artists, which is what piracy is all about (can you say someone stole from you if they are paid a mutually agreeable price through SOCAN, which SOCAN oddly decides is fair). CRIA/RIAA will not risk loosing in court and would prefer it stay a legal grey area.
  • Tax evasion (Score:3, Insightful)

    by SleepyHappyDoc ( 813919 ) on Saturday October 20, 2007 @11:24PM (#21060023)
    I bet the sneaky idea behind this is to bust torrent users for evading this new tax.
  • Pure corruption. (Score:4, Insightful)

    by BlueParrot ( 965239 ) on Saturday October 20, 2007 @11:43PM (#21060089)
    The proposed tax will tax companies like emusic, Amazon etc, and give the money to Sony BMG, Universal etc...

    In short, a large cartel is trying to screw over the competition by lobbying politicians to create bad laws. This is pure corruption, and nothing else.
  • by starfishsystems ( 834319 ) on Saturday October 20, 2007 @11:55PM (#21060157) Homepage
    Yes, they now regret it... too bad!

    But they don't regret it. They're endorsing the principle by asking for it to be applied more broadly.

  • by BlueStrat ( 756137 ) on Sunday October 21, 2007 @12:07AM (#21060267)
    Treatment of a smoker is even more expensive then the longer life of the average non-smoker, and there are plenty of sources to back it up. Google pulled up these articles:
    http://www.cdc.gov/MMWR/preview/mmwrhtml/mm5114a2.htm [cdc.gov]
    http://www.bera.com/smoking.htm [bera.com]


    Diamondmagic, this isn't aimed at you personally, but I feel I have to say a few things here.

    ~rant on

    This is what I hate about strident anti-smoking groups and individuals. You could say the same about a multitude of perfectly legal accepted behaviors.

    What about over-eaters? Those that participate in risky sports? People who work really hard at their jobs? Explorers? Astronauts? Scuba divers? Mountain climbers? Consumers of alcohol? Those that choose to live in high-crime areas? What about those irresponsible people that go outside in cold weather without a hat and heavy enough coat? Those that don't have an exercise regimen? Meat eaters? Those that (in someone elses' opinion) spend too much time at a computer/surfing the net/playing games that some may consider harmful?

    How about people who deliberately expose themselves to harmful ultraviolet radiation to get a tan? Driving or traveling by automobile is one of the riskiest common behaviors, and far surpasses the costs to society of tobacco, even considering the insurance required of drivers in most states.

    I flatly refuse to believe all these 'secondary-smoke' alarmist advertisements, stories, and studies. They fly in the face of common sense, and I believe they are constructed as a reason to further regulate and legislate behaviors for the sake of politics power and money. They rarely work as "intended", witness Prohibition and the "War On Drugs", but usually succeed at expanding government power and reducing individual rights.

    It is the nature of humans to engage in risky behaviors, even those that they know are harmful to themselves. The only way to stop it is to put everyone in a Matrix-type tube of goo for their entire lives.

    Sure, by all means make sure people understand the risks, and try to place minimal, well-reasoned, and practical restrictions that are agreed to by the majority on the extremes, but drop the idea that you can or should try to regulate through law and taxes every behavior that someone thinks may be harmful, for it may be something that matters to *you* that may be the next crusade of the behavior-gestapo.

    ~rant off

    Strat
  • by Desipis ( 775282 ) on Sunday October 21, 2007 @12:28AM (#21060391)
    You could say the same about a multitude of perfectly legal accepted behaviors.

    Many of the things you list, the major risk is injury (or death) which to much cheaper to treat (bandages, plaster cast, a few weeks in hospital or just a coffin) than the long term illness (years of in & out of hospital, expensive drugs and dedicated caring) that smoking creates. Others such as obesity, unhealthy diet, no exercise I would support a tax on. As for uv radiation, you could tax solariums but taxing people in the sunlight is just unfeasible.

    There are some things you list such as driving where the benefits gained outweigh the costs, i.e. if no one drove then society would be so much less productive that we may not even have hospitals. Smoking is almost completely unproductive.

    I flatly refuse to believe all these 'secondary-smoke' alarmist advertisements, stories, and studies. They fly in the face of common sense, and I believe they are constructed as a reason to further regulate and legislate behaviors for the sake of politics power and money.

    Up until this point you had somewhat of an argument. Now you're just being silly and paranoid. There's scientific evidence behind the notion that second hand smoke causes harm. If it was about power and money then wouldn't "The Man" be all for pushing this high tax, high price addictive substance?

    It is the nature of humans to engage in risky behaviors, even those that they know are harmful to themselves. The only way to stop it is to put everyone in a Matrix-type tube of goo for their entire lives.

    It's not about stopping people doing it, it's about ensuring the cost the person pays represents the entire cost of the action (the tax0 and preventing that person making the choice for someone else (bans on smoking in public places). Besides, if it's not going to stop you, what are you complaining about?

    Sure, by all means make sure people understand the risks, and try to place minimal, well-reasoned, and practical restrictions that are agreed to by the majority on the extremes, but drop the idea that you can or should try to regulate through law and taxes every behavior that someone thinks may be harmful, for it may be something that matters to *you* that may be the next crusade of the behavior-gestapo.

    Come up with methods for other issues that distribute the hidden costs and I'll support it.
  • Re:WTF? (Score:2, Insightful)

    by Kierthos ( 225954 ) on Sunday October 21, 2007 @01:15AM (#21060595) Homepage
    But, technically, it is a punishment.

    "Hey, we can't find every single person in Canada who is pirating music, eh? So what we're going to do, you hosers, is charge extra for all the legal downloads. And we're going to charge for every single one of them back to 1996, eh?"

    See, the punishment isn't so much the extra tax on all future purchases. Okay, if you add a new tax, people can decide whether or not they want to continue purchasing the same item with that new tax added on. But when you make it retroactive back over a decade, that is a punishment. The purchasers can't decide to un-buy something they bought a decade ago, or five years ago.
  • Re:WTF? (Score:2, Insightful)

    by Andrzej Sawicki ( 921100 ) <ansaw@poczta.onet.pl> on Sunday October 21, 2007 @02:13AM (#21060805)

    The use of the word piracy by the Copyright Board spokesperson was deliberately misleading.
    Fixed.
  • by diamondmagic ( 877411 ) on Sunday October 21, 2007 @03:20AM (#21061059) Homepage
    Great grandparent only asked about medical costs, this is a nice article about the bigger picture: http://www.cato.org/pubs/regulation/reg20n3c.html [cato.org]
    It says the government probably is making more off taxes then the cost of smoking, and that it is stupid to say that its purpose is to fix the social/medical cost when it is really about bureaucrats making money, kinda like the music industry.
  • by aztracker1 ( 702135 ) on Sunday October 21, 2007 @04:22AM (#21061305) Homepage
    I can't say for myself so much, as I am a non-smoker, and always have been... however, smokers tend to take more regular breaks throughout the work day, and are less likely to get burnt out at a job... and could potentially be more productive overall.... However, I don't believe that socializing medicine is a good idea, and as such, smokers would have to pay more for themselves, so it is their own choice... Time may change this, however smokers already pay huge taxes on each pack of cigarettes in this country, so even if it is socialized, then those funds should probably be used to cover additional costs, instead of it being a special sin tax that it is today.
  • Taxes ho! (Score:2, Insightful)

    by Impy the Impiuos Imp ( 442658 ) on Sunday October 21, 2007 @08:16AM (#21062219) Journal
    Senator: What good is electricity in the home?

    Not a Senator: Sir, in 20 years, you'll be taxing it.

"When the going gets tough, the tough get empirical." -- Jon Carroll

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