Why Would A Tax Haven Adopt A Music Tax?

from the ironic,-don't-you-think dept

Wed, Jan 21st 2009 10:10am — Carlo Longino

The latest record label revenue-generation scheme that's come into vogue is the music tax -- charging every ISP subscriber a flat fee that would give them a blanket license to download music from any source, even P2P networks. In theory, it sounds great, but it's a flawed idea for many reasons, not least of which because it necessitates a massive bureaucracy to levy and collect the tax (which the music industry likes to refer to as a "voluntary license"), then determine how to distribute it (or some tiny portion of it) to artists and other relevant parties. So it was a little surprising to see a government official from the Isle of Man voice his backing for such a tax on his island. The announcement was particularly ironic, given that that Isle of Man is a tax haven.

However, it seems that the government official was just offering up suggestions for the music business; Techdirt's own Mike Masnick was in the session at the Midem conference where the comments were made and says they appeared to be meant as suggestions from the official on how to best show off the Isle of Man's broadband infrastructure. Even with that in mind, it's not clear how levying a mandatory tax on every broadband subscriber shows off the network at all, as opposed to the island's tax collection prowess. What's interesting is that even the BPI -- the UK equivalent of the RIAA -- doesn't like the idea, preferring instead to cut deals directly with ISPs, hoping to maximize profits rather than rely on government-established rates. While ISPs selling out their customers to the music industry is pretty deplorable, at least in that scenario, customers have the opportunity to vote with their wallets and go to another provider. But when the government levies a tax on every broadband subscriber, solely to prop up the music industry's ailing business model, that opportunity doesn't exist.

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Filed Under: isle of man, music tax, tax haven

14 Comments

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John Doe, 21 Jan 2009 @ 10:57am

Let me get this straight, this music tax will be levied against every broadband subscriber, even those of us who don't download music? And it gets us off the hook for file sharing since we pay the license (tax)? Well I can guarantee I will pirate every song known to man if I am getting taxed for an activity I don't currently participate in.
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Some IT Guy, 21 Jan 2009 @ 11:10am

Comcast
I would drop Comcast in a second if they decided to do that.

Actually doesn't many torrent clients (like uTorrent) encrypt the files that are being downloaded and uploaded?
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:Lobo Santo, 21 Jan 2009 @ 11:17am

Re: Comcast
Let's not even pretend the artists will be getting any of the money. The BPI/RIAA will get the money and say "now, who should get it? Oh well, we'll just hold on to until we figure out which artist(s) deserve these funds."
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Anonymous Coward, 21 Jan 2009 @ 11:24am

Well
It is mainly dinosauric rock stars that are hiding thier money there, so it kinda makes sense. I predict Monaco will soon pass a similar law LOL . . .
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Ben Robinson, 21 Jan 2009 @ 11:51am

Yeah but it is very cheap
The price he is proposing for this tax is 1 euro e year! Seems like a bargain to me ;-)
http://www.theregister.co.uk/2009/01/21/manx_p2p_one_euro_a_year/
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Tom The Toe, 21 Jan 2009 @ 12:02pm

Re: Yeah But it's very cheap
Who are they kidding? 1 euro a year would not even pay for the bureaucracy needed to collect it. And if the government is going to collect it and disburse it they will want a cut.
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Canucklehead, 21 Jan 2009 @ 12:04pm

Assumed guilty
I've heard this suggestion before, and a few points bother me.

(1) Every internet user is assumed to be guilty of file sharing and punished (taxed) accordingly.

(2) Will artists really see a fair and proportionate share of the tax collected ?

(3) Who's next ? Couldn't Larry Flynt make the same demands about online porn ?

(4) Won't everyone stop buying music thru the legitimate distribution channels, effectively crushing the industry they hoped to protect ?
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Crashoverride, 21 Jan 2009 @ 1:55pm

So does this mean as a business owner I now have to pay a music tax for everyone of my internet connections at all my sites? Does this mean that every McDonald's, Walmart and Library have to pay the "Tax" What about all of connections for devices connected to the internet that cannot even access music such as Coke machines manufacturing machines Point of Sale Terminals. Furthermore does my grandmother have to pay despite not having any interest in the Internet except for the occasional email?
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Leo, 21 Jan 2009 @ 2:31pm

Re: Assumed guilty
Good points. But you forgot:

(5) If I pay, I expect to get something in return. In this case, it would be logical to assume I can now download legally whatever I want.

But I suspect the music industry does not like this line of reasoning.
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Anonymous Coward, 21 Jan 2009 @ 3:41pm

@leo, that is the law in Canada.
Music piracy tax, means you cannot get charged with pirating as you have indeed 'paid' for it in taxes.
The same theory applies to marijuana tax stamps.
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inc, 21 Jan 2009 @ 4:30pm

It would be nice to vote with your wallet if there was competition in the broadband market. When your choice if cable, dsl, or satellite and they all suck; then you're pretty much stuck.
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Anonymous Coward, 21 Jan 2009 @ 5:01pm

Re: Re: Assumed guilty
6) If I am deaf, do I get a refund ?
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P.T. de fool, 22 Jan 2009 @ 3:47am

FYI...
...The Isle of Man is not a "tax haven".
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Miguel M., 26 Jan 2009 @ 11:26am

Well, any other sugestions?....
Should we pay for a new bridge even if we don´t drive through it? Should we pay for other people healthcare? Should we... There are people that simple don´t learn to live in a organized society.
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