Download Taxes As a Weapon Against File-Sharing 451
An anonymous reader writes "An examination of a new "digital downloads" taxation law in Washington State suggests that files downloaded via file sharing programs may be covered by the law — meaning that you may be expected to pay taxes based on 'the value of the digital product ... determined by the retail selling price of a similar digital product.' Thus, if you were to download music or movies and not pay the taxes, would you be liable for tax evasion charges? How much do you want to bet the RIAA will push exactly that claim?"
Drug tax stamps? (Score:5, Insightful)
Don't forget to buy your drug tax stamps while you're at the post office.
No different from sales tax evasion (Score:5, Insightful)
Re:Sounds good... (Score:4, Insightful)
But you didn't download the song. You downloaded several chunks of random (encrypted) data which could be assembled into a song. The chunks didn't even all come from the same place.
Also, if these downloads are illegal or part of illegal activity, there's a conceptual issue of being able to tax them in the first place, and secondly, an issue with the state using funds derived from the proceeds of crime.
Re:Sounds good... (Score:4, Insightful)
Considering how often the RIAA and ilk try to push the idea that downloading is stealing, I think we should use it against them, if they do try to pull this stunt.
Do I get charged with tax evasion of 8.25% of the value, if I steal a car? No. I get charged with car theft.
So if the RIAA think downloading is stealing, I should be charged with theft, not tax evasion. But downloading is not stealing, it's copyright violation, so I shouldn't be charged with theft, either.
Could be an interesting precedent ... (Score:5, Insightful)
It occurs to me that if this happens, it has the potential to be applied to anything else that's covered by copyright. Consider the results.
If you check a book out from your local library and read it, you'll be liable for the sales tax on the retail price of the same book (at a book seller of the prosecution's choice).
If you leave a newspaper (hey, remember them?) lying around in your house and a visitor reads it, they'll be liable for the sales tax on not just that paper, but for a subscription to the newspaper.
If your local school has textbooks that they let students study from, those students (or their parents) will be liable for the sales tax on the price of the books.
If a store is playing music audible from wherever you may be (sitting at a table in a restaurant, using an elevator, walking by on the sidewalk), you are liable for the sales tax on the album that contains the music that you heard.
Since everything is by default copyrighted as soon as it's "published" (whatever that actually means), any time you read anything from any source or hear anything that was recorded, you will be required to learn the retail price for the copyrighted work, and pay the sales tax on it.
We've been in the habit of being a bit bemused by the fact that, when the authorities don't have any evidence against some supposed criminal, they customarily just charge them with tax evasion. But this is no longer just something that big-time Mafia capos and politicians have to worry about. Now we can all be tax evaders, by merely reading something somewhere and neglecting to determine its retail sales price so we can pay the sales tax.
And I can make you a criminal by merely putting copyrighted text somewhere that you read it, or by putting recorded sound somewhere that you hear it.
It can be fun to think of what might be the ultimate motive for passing laws like this. Look up the phrase "nuisance law" for further explanation.
OpenOffice.org (Score:5, Insightful)
They'll make a lot of money off downloads of OpenOffice.org... which is similar to the outrageously priced Microsoft Office.
Re:Sounds good... (Score:2, Insightful)
Taxation on an activity has the effect of legitimizing it. Paying 15% of the value of an MP3 to the government still has advantages to paying 100% of the value to RIAA et al...
Re:It's my money (Score:5, Insightful)
In Hawaii there was a bridge out that lead to an important tourist area, no bridge meant no business. The government said $4 million and 2 years. The locals people got together and did it in 8 days for "free" with donations from the community.
Our government is only "out of control" because we have demanded that it fill every whim and desire we have.
Re:OpenOffice.org (Score:5, Insightful)
Or, will MS Office become downloadable tax-free, since it is similar to the $0.00 OpenOffice.org?
Re:Impossible to enforce (Score:5, Insightful)
If computer software is not a digital good, what the hell is it? Do legislators live on a planet even remotely similar to ours?
Re:No different from sales tax evasion (Score:4, Insightful)
Good. Then I need not worry. I'm not downloading DVDs, what I'm downloading are entirely different products. A downloaded film compressed to a 700 MB AVI is different from a 4 GB film in a VOB file recorded on a DVD.
Re:Drug tax stamps? (Score:3, Insightful)
Why wouldn't the same logic apply to this, I wonder? By this reasoning, it's surprising that they can claim tax evasion on any kind of illegally obtained money.
Re:Sounds good... (Score:3, Insightful)
We pay income tax, though, so it's really apples to starships in comparison
Re:Sounds good... (Score:4, Insightful)
Copyright infringement that is not for profit (i.e., illegal downloading) is a civil, not criminal, infraction. Legally it is not "theft", and therefore you have no "stolen" property.
Re:Sounds good... (Score:4, Insightful)
I figured a Capone reference would show up in this thread. There's one difference though, Capone was sentenced to a mere 11 years and actually served only 7, even though the jury 'admitted' they were really trying to put him away for everything he had done. My bet is, before long, some file sharer will be serving more than that. America is becoming a nation of inspector Javerts.
Re:Sounds good... (Score:4, Insightful)
Anytime you receive something of value you usually are required to pay taxes on it regardless of how you acquired it, and no, you do not get to assign the value.
But there's usually also an exception for gifts up to a certain amount. You don't pay tax on every sweater you get for Christmas, right? If someone gives you a file, why would that be any different?
Re:Sounds good... (Score:3, Insightful)
First, sales tax is owed by the seller, not the buyer.
Second, there's only a sale if money changes hands. If you give something away for free, you don't owe sales tax on it. The recipient might owe income tax on the gift, but there's an exemption up to a certain amount anyway: when was the last time you paid tax on a present someone gave you?
Re:Sounds good... (Score:2, Insightful)
Does the RIAA have to pay capital gains taxes on the appreciation of their rights that came with the theft of the commons in their copyright extension [wikipedia.org]? That's a profit, right? It was the untold wealth of a hundred years of culture - it ought to be worth a good bit.
If they claim it's worth nothing, well, then we want it back.
Re:Sounds good... (Score:4, Insightful)
I like the new income tax brackets you guys are installing now.
First £5,715 not taxed.
The next £760 is taxed at 11.5%.
The next £37,400 is taxed at 31.5%.
The next £56,125 is taxed at 41.5%.
The next £12,950 is taxed at 61.5%.
The next £37,050 is taxed at 41.5%.
Everything above £150,000 is taxed at 51.5%.
So if you earn £150,000 a year. You'll lose 39% of your income to income taxes. Since a VAT is basically applied to everything (I know there's exceptions, but I'm just saying that you pay 15% additional on every £ you spend), that's another 13% of your income that you lose to that (15/115=13%). So at $150,000 a year, you'll have less than 50% of your income to spend, even though it looks like you have over 60%.
£100,000 a year and you lose 35.1% for about 48.1% total.
£50,000 a year and you lose 28.8% for about 41.8% total.
£32,000 a year and you lose 25.3% for about 38.3% total.
That is all just in your VAT and income taxes too. God only knows how much additional excise taxes or what not you have to spend. The VAT is such a tax on the poor, it's not even funny.
http://www.economist.com/opinion/displaystory.cfm?story_id=13576151 [economist.com]