More Details On Isle of Man's Music Tax Idea: One Euro Per Year

from the better-and-better dept

We wrote earlier about comments made by a politician from the small island of the Isle of Man, suggesting that the government there implement a music tax on its broadband subscribers. The Register's done some more digging, and spoken to the island's e-commerce minister, who suggests the implementation of a one euro per year music tax (thanks to TD reader Ben Robinson for pointing it out in the comments), with an opt-out available to those who don't want to pay. While that sounds great for consumers, it's almost a laughable amount. As another commenter on our earlier post pointed out, one euro per year probably won't even cover the cost of the bureaucracy to collect and redistribute the tax. The minister told El Reg, "If you take a Euro a year from millions, then that's a lot of revenue." Perhaps, but it pales in comparison to the billions the music industry currently earns. For instance, the UK has some 16.5 million broadband subscriptions -- charging each one of them a pound or euro per year would pale in comparison to the one billion pounds the record industry in that country currently generates. Also, while it's nice that the minister recognizes that people shouldn't be forced to pay the tax if they don't want to, why must it be an opt-out system, rather than an opt-in one?

Let's take that a step further: why should the government get involved at all? If the record labels are interested in developing some sort of blanket licensing system, let them do it, and figure out how to collect and redistribute the fees. Of course, they've shown little interest in voluntary systems, preferring to go directly to ISPs or to universities. Currently governments, ISPs and universities don't force people to buy CDs; they shouldn't start forcing them to pay for music downloads either.

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

Why Would A Tax Haven Adopt A Music Tax?

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

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.

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