Saturday, June 28, 2008

Taxing Your Memory

Spain wants to tax your memory.

Ostensibly an anti-piracy tax, it will apply not only to music players but to anything "capable of recording, copying, or storing" pictures or sound that might be owned by someone else. This, of course, includes printers and ink cartridges and the media for your own digital camera. After 18 months of delay due to protest over the tax' reach and the fact there's no guarantee the tax will actually end up in the pockets of the artists the tax presumes are being robbed, it will go into effect July 1.

Spain isn't the first country to do this. The Copyright Board of Canada decided that music lovers' hard-drive-based music players were being used to pirate music, and extended blank media taxes to cover them, as well. Being based on capacity, the taxes that were a tolerable sip from the trough being spent on blank tapes and CDs were a voracious gulp -- up to $25 apiece -- from the flow of funds spent on portable music players. The fees collected in Canada were returned after the tax was overturned by the Canadadian Supreme Court.

The refund raises a peculiar question: if a year of fees collected between December 2003 and December 2004 were still on-hand in May of 2005 to be refunded to firms from which the tax had been collected, who exactly was supposed to be the beneficiary of the tax? It obviously wasn't artists, who never received it.

And this returns us to original questions about the reason d'ĂȘtre for the original tax: if it doesn't replace artists' lost revenues, what does it do?

(One wonders a bit about the beneficiary of the refund: assuming consumers ultimately bore the tax as a built-in cost of their players, the tax refund would just be a windfall for device makers or importers. Apple had to devise a special claims process to make sure customers got the benefit of the refund; others may not have bothered.)

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