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Want To Know How Not To Encourage Innovation? Double Taxes On Technology

from the welcome-to-argentina dept

Wed, Jun 3rd 2009 7:03pm — Mike Masnick

Last week, VentureBeat wrote about how politicians in Argentina, including the country's president, were pushing a plan to nearly double taxes on all tech products not made in the province of Tierra del Fuego. As the article notes, it's not clear why Tierra del Fuego gets this special benefit, but the whole idea is one that will massively harm innovation and economic growth in the country. Raising most taxes, in general, when the economy is sour is generally a bad idea (there are some exceptions), but doing it on the very tools that increase productivity and economic growth in every other industry? Not only do you harm the tech industry, but you harm pretty much every other industry that uses technology to innovate and increase productivity.

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Filed Under: argentina, innovation, taxation, technology

13 Comments

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Anonymous Coward, 3 Jun 2009 @ 7:06pm

There is also the issue of import substitution vs export promotion. You want to encourage your own firms to produce better products, taxing the competition does not do this.
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Anonymous Coward, 3 Jun 2009 @ 7:39pm

The exception in Tierra del Fuego makes sense, as Tierra del Fuego is generally free from taxes, and it's proposed as a production center for technology. The fact is we (argentinians) have almost no indigenous technology factories, and that's why it doesn't make sense. If we did have technology factories, I'll be absolutely pro taxes on *imported* technology goods. As is, the whole plan makes no sense. And as has been pointed elsewhere, it's a measure that affects the poor more than the rich, preventing them access to technology, already very expensive in Argentina because of the exchange rate with the dollar.
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Lawrence D'Oliveiro, 3 Jun 2009 @ 7:48pm

R&D Tax Credit?
Quite often governments also offer tax credits against companies’ R&D expenses. For example, at one time Australia was offering a 150% credit. Is that sort of thing being done here?
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Anonymous Coward, 3 Jun 2009 @ 7:59pm

There is a new secretary dedicated to R&D that gives promotional credits (no tax exemptions, though) to new technology companies, if they can prove they have an innovation to develop and are willing to develop it. I don't think that justifies the tax, as companies will probably not be as affected as individuals.
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Jack, 3 Jun 2009 @ 9:11pm

Ridiculous
I thought Obama was supposed to be the modern President. Why is he trying to tax technological innovation? That is so ridiculous. Although he is better than Bush, there are alot of things I am surprised at about Obama. I guess the democrat side of him wants to raise taxes so bad that he doesnt care of the consequences.

Jack
Registry Cleaner Tech Support
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Anonymous Coward, 3 Jun 2009 @ 9:37pm

Obama isn't the president of Argentina... mMybe you should read the single paragraph blog post. That can't be too much to ask can it?
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John, 3 Jun 2009 @ 9:38pm

Re: Ridiculous
They're not talking about Obama...it's Argentina.
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Anonymous Coward, 3 Jun 2009 @ 11:04pm

Re:
Control of information equates to solidified power. Limiting technology to the few does exactly that; what else can you expect under a dictatorship.
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Reading Comprehension, 3 Jun 2009 @ 11:12pm

"I thought Obama was supposed to be the modern President. Why is he trying to tax technological innovation?"

You are a fucking idiot.

Reading the first line in a story is key. Argentina. Please, never post anything ever again.
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Anonymous Coward, 3 Jun 2009 @ 11:30pm

Hopefully the politicians in Argentina at what's happening in California, which is allegedly the world's seventh-largest economy. Onerous local and state sales tax increases have turned technology buyers into tax cheats who are buying online from out-of-state vendors. The government of Argentina will live to regret the decision to slap on a 'technology tax,' because of the unintended consequences of an educated and pissed off middle-class who will find a way to avoid paying the taxes entirely, just like the consumers in California have done.
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Anonymous Coward, 3 Jun 2009 @ 11:31pm

Re: duh hit the send button too quick
Hopefully the politicians in Argentina will take a look at what's happening in California, which is allegedly the world's seventh-largest economy. Onerous local and state sales tax increases have turned technology buyers into tax cheats who are buying online from out-of-state vendors. The government of Argentina will live to regret the decision to slap on a 'technology tax,' because of the unintended consequences of an educated and pissed off middle-class who will find a way to avoid paying the taxes entirely, just like the consumers in California have done.
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Anonymous Coward, 4 Jun 2009 @ 4:04am

"... what else can you expect under a dictatorship". I don't really know what country you're thinking off. Argentina is a democracy. Not Cuba or Venezuela.
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Anonymous Coward, 4 Jun 2009 @ 10:00am

fuck them
who cares
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