iRS

Julian Sanchez | April 29, 2005

The Netherlands is considering a tax on MP3 players that would tack on about $4.30 to the sticker price for every gigabyte of storage. Multiply that by a 40–60 GB iPod and suddenly humming looks pretty attractive. A similar German tax on hard drive capacity, The Register reports, "will soon become larger than the entire PC industry revenue if it is left in place."

Comments

|4.29.05 @ 10:35AM|#

If intellectual property rights are about rewarding artists, then riddle me this: how am I stifling creativity by downloading a song by Jimi Hendrix? How does paying Michael Jackson for the privelege of listening to a song by the Beatles encourage innovation?

The current proposal to tax hard drive space makes a mockery of their own arguments. I fail to see how a tax on something as far removed from the actual creative process as hard drive capacity benefits anyone but their shareholders. What incentive to share those profits with the actual musicians or to re-invest that money into making new music does this proposal really create?

MP|4.29.05 @ 11:14AM|#

How does paying Michael Jackson for the privelege of listening to a song by the Beatles encourage innovation?
Because it signals to future investors the potential value of an artist's work, and thus encourages continued investment in the industry.

But yes, the tax is asinine.

|4.29.05 @ 11:22AM|#

MP that would be irony, yes, if it weren't so plausibly true.

|4.29.05 @ 11:23AM|#

They're soon going to start taxing you for the waste your body produces by the miligram over in Europe. ;)

|4.29.05 @ 11:29AM|#

Hmmm.

|4.29.05 @ 11:48AM|#

God love The Register, but I don't quite understand; the tone of the article implies that they know how rediculous it is, but they have consistently pushed for this kind of thing, under the banner of 'compulsory licensing' as a solution to the DRM/Piracy battle.

http://www.theregister.co.uk/2004/02/11/why_wireless_will_end_piracy/

http://www.theregister.co.uk/2004/12/28/fisher_promises_to_keep/

I think this topic would make an interesting topic for a Reason article.

|4.29.05 @ 11:49AM|#

The article states that the tax would be for anything that could possibly hold pirated works... that could mean a desktop harddrive and flash memory, not just mp3 player. If interpreted broadly enough this could really hurt any computing business in the Netherlands.

|4.29.05 @ 12:19PM|#

"The idea of all levy based legislation is that some form of copyright collections agency collects tax by imposing a surcharge at the point of sale for any storage devices that could possibly be used to store pirated works."

Holy shiznickle, Batman! Well, this here cardboard box could possibly be used to store counterfeit documents or "pirated" bootleg books. I guess the netherlands should be taxing cardboard boxes---along with any other object that "could possibly be used to store pirated works". Milk crates. Safes. Envelopes. My pockets.

The Onion couldn't script this any better.

Xmas|4.29.05 @ 12:42PM|#

Soooo...

How many iPods can you fit in a rectum?

If ever there was a chance for a black market.

Maybe I can fit an iPod inside a cassette player frame in case they start grabbing people wearing headphones.

|4.29.05 @ 12:46PM|#

I'm gonna download me an illegal copy of "Taxman".

|4.29.05 @ 1:01PM|#

I can see broadband internet access getting stuck with these kind of pseudo-compulsory licensing schemes next.

Of course, these schemes are far worse than compulsory licenses, because despite the copyright owners getting paid they can still sue people for infringement (with the wrinkle that 'personal copying' in Europe isn't necessarily infringement).

Brian Marks|4.29.05 @ 1:15PM|#

I guess we can start taxing the internet.

|4.29.05 @ 1:41PM|#

I guess we can start taxing the internet.

And the floodgates open... Once you start it up for the compulsory license, people will start adding a penny here and a penny there for their pet causes, most of which will be just as fundamentally unrelated to the internet as copyright licensing.

|4.29.05 @ 1:46PM|#

Soooo...How many iPods can you fit in a rectum?

With that in mind, my iPod Shuffle boosterism seems a lot less silly now, doesn't it?

|4.29.05 @ 1:56PM|#

only if you're a scaredy cat.

|4.29.05 @ 2:40PM|#

Let me tell you how it will be:
there's one for you, nineteen for me.

|4.29.05 @ 2:47PM|#

I suppose these geniuses will be scratching their heads in bewilderment in a couple of years when their economies are in the toilet, should enforcement prove adequate.

|4.29.05 @ 3:02PM|#

Oddly enough, these storage taxes have something in common with living in New York City or San Francisco.

People ask why folks in NYC or SF tolerate the government taxes, regulation, and other sundry interventions. Well, the value to those folks of living in the city is much higher than the free market costs. The state -- through iterations of accidental recognition -- learns this fact and takes a cut of the consumer surplus in whatever ways it can.

I expect it's similar in this case: "Lots of people were buying products based on storage at price $X. The price of storage is dropping rapidly to price $Y. If we levy a tax of $X-Y, lots of people will still buy storage and we'll have another source of revenue!"

No notion or concern that that consumer surplus has a value in and of itself. No concept that those price shifts beget innovation and advancement in related and unrelated areas.

Governments suck.

|4.29.05 @ 3:30PM|#

A lot closer to home, Canada has had a similar levy on blank recording media for some time; it was extended to flash media and small hard drives last year.
http://tinyurl.com/d8hzo

|4.29.05 @ 4:26PM|#

Idiots! The power to tax is the power to destroy, or in this case, silence.

Parts of Europe seem to have this cancer. They're dying. There's hope for the newly liberated eastern Europe. But no one should invest in the old Europe unless and until they get their free-enterprise act together. Their citizens will suffer until they do.

|4.29.05 @ 4:45PM|#

So right, Rick! But I'm afraid that the expanding Euro-zone will kill the promise of eastern Europe.

Brian Carnell|4.29.05 @ 5:19PM|#

Soon to be followed, of course, by the $.10/page tax on blank copy paper.

|4.29.05 @ 6:12PM|#

I think this is brilliant. Instead of copyrights we can have a tax on storage media and use that tax to subsidize entertainment. Central planners can figure out what sort of entertainment people like and budget accordingly.

Westerners will finally get to enjoy the same high quality entertainment that Eastern Europeans took for granted for so many decades!

Just kidding :)

|4.30.05 @ 1:33AM|#

The Real Bill,

I hope you're wrong but I fear you're right. Remember the thread a couple of weeks ago dealing with the German and French governments' complaints concerning eastern Europe's low tax rates?

|4.30.05 @ 1:37AM|#

As a Dutch national, I'd like to say I'm surprised, but I'd be lying. In the past, similar levies were imposed on blank cassette tapes and CD-Rs. Happily, however, there has never been a worse time to implement a measure like this one. Thanks to open borders between the states party to the Schengen agreement, especially in combination with the introduction of the Euro, there is nothing to prevent a resident of the Netherlands from hopping over the border into Belgium to buy an iPod, or to pick one up in parts further south while on vacation, and bringing it back to the Netherlands.