[governance] FW: TP: city government exercising policy on Google Applications / consumer rights / Consumer Protection Act / trial period
michael gurstein
gurstein at gmail.com
Wed Jul 13 11:31:45 EDT 2011
Kerry,
Interesting points and a good basis for a back and forth...
-----Original Message-----
From: governance at lists.cpsr.org [mailto:governance at lists.cpsr.org] On Behalf
Of Kerry Brown
Sent: Wednesday, July 13, 2011 7:40 AM
To: governance at lists.cpsr.org
Subject: RE: [governance] FW: TP: city government exercising policy on
Google Applications / consumer rights / Consumer Protection Act / trial
period
I've been lurking here for a while. This is my first post. This discussion
is very interesting and Phillippe's post in particular.
Phillippe:
Do you really think a UN style agency that collects taxes and disperses the
money collected to hundreds of thousands of competing jurisdictions could
work? The same questions will still apply and we will have another layer of
bureaucracy to deal with.
CLEARLY SUCH A DEVELOPMENT (I.E. AN AGENCY) WOULD BE THE OUTCOME OF SOME
SORT OF BINDING INTERNATIONAL TREATY WHICH COVERED THIS ISSUE.
THAT A STRUCTURE WOULD NEED TO BE ESTABLISHED FOR THE EXECUTION AND
ENFORCEMENT OF THE TREATY IS NEITHER HERE NOR THERE. IT WILL BE MORE OR
LESS EFFICIENT/EFFECTIVE DEPENDNG ON ITS GOVERNANCE IN EXACTLY THE SAME
MANNER AS CURRENT SUCH STRUCTURES UNDER NATIONAL JURISDICTIONS. HOPEFULLY,
SUCH A STRUCTURE WOULD BE BASED ON A CLEAR EYED ASSESSMENT OF CURRENT
STRUCTURES AND AN IMPLEMENTATION USING THE MORE ADVANCED TOOLS FOR
TRANSACTION MANAGEMENT (AND MONITORING) AS HAVE COME AVAILABLE THROUGH THE
USE OF ICTS.
First - How much of the money collected would simply go to the bureaucracy
that would be created to administer this?
SEE ABOVE... THIS IS A MATTER OF EFFICIENCY OF
IMPLEMENTATION/OPERATION--SOME STRUCTURES ARE BETTER, SOME ARE WORSE --
HOPEFULLY THIS ONE WOULD A VERY GOOD AND EFFICIENT ONE.
Second - This would not solve the problem of each jurisdiction having
different rules about what is taxed and what the tax rate is.
THIS WOULD OF COURSE, BE THE SUBSTANCE OF THE TREATY ON WHICH THE STRUCTURE
WAS BASED.
Third - How would the agency determine who gets what portion of the money
collected? There may be national, provincial, municipal, and other claims to
the tax collected. There would be claims to the money from the
jurisdictions where the vendor is located, where the goods are located (i.e.
data center where the actual bits are located), where the bits physically
end up, and where the buyer is located. You could potentially have a dozen
or more jurisdictions claiming a portion of the money. How would you
calculate the tax at the time of the transaction? Is each jurisdiction
additive?
THIS ALSO WOULD BE COVERED BY THE SUBSTANCE OF THE TREATY AND OF COURSE
THERE WOULD BE AMBIGUITIES ETC.ETC. -- AS SOMEONE ALREADY SAID, IT WOULD BE
A GOOD TIME TO BE A TAX LAWYER, I WOULD GUESS.
The level of bureaucracy needed to administer this would cost more than the
taxes collected. I think an agency like this would make the problem worse
than it is now. I believe that in the long run it will prove impossible to
tax the sale of IP. There will be competition between jurisdictions to get
the tax revenue, either on their own or through the proposed agency. Some
jurisdictions will make it advantageous to register or virtually locate the
sale in their jurisdiction. This will drive the tax revenue down to a point
where it is unprofitable for most jurisdictions to collect it. At that point
they will want to revisit the paradigm. We will be right back where we are
now. Jurisdictions that try to tax the sale of IP need to find other sources
of tax revenue. The product is too ephemeral to successfully tax.
SEE ABOVE... I WOULD HAZARD THE OPINION THAT THESE ARGUMENTS WERE MORE OR
LESS EXACTLY THE SAME ARGUMENTS AS HAVE BEEN RAISED WITH RESPECT TO THE
CREATION OF ANY TAXATION STRUCTURE AND IMPLEMENTATION SINCE THE BEGINNING OF
TIME...
If the sale is of physical goods then the existing tax system should work
fine.
BEST,
MIKE
Kerry Brown
> -----Original Message-----
> From: governance at lists.cpsr.org [mailto:governance at lists.cpsr.org] On
> Behalf Of Philippe Blanchard
> Sent: July-13-11 6:12 AM
> To: governance at lists.cpsr.org; Daniel Kalchev
> Subject: Re: [governance] FW: TP: city government exercising policy on
> Google Applications / consumer rights / Consumer Protection Act /
> trial period
>
> I follow-up Daniel's analysis.
> In his example, he clearly demonstrates that we are in a situation for
> which the classical rules based on physical territory cannot apply.
> Eventhough those rules proved useful, they were designed more than 200
> years ago
> (Beaumarchais- 24 January 1732 - 18 May 1799- worked on Intellectual
> property consideration and set the basis of main of our current IP laws).
>
> We all know that those rules cannot longer apply as is and the
> question is then to review what is the scope that can embrace the
> fact we are moving, we buy "stuff " in one country to be used in
> another country... and when those "stuff" are intangibles, their
> materiality (or lack of) clearly conflicts with the classical,
> material rules we used to abide by.
>
> I am afraid we cannot go further if we still try to cut&paste rules
> that were designed hundreds of years ago to the world we now live in.
> Internet governance and intangibles taxation require the creation (or
> the
> mobiilization) of a meta-structure, above the national levels... And for
me, it
> needs to be a UN-type agency.
>
> Philippe
>
>
>
> On Jul 13, 2011, at 2:53 PM, Daniel Kalchev wrote:
>
> Interesting discussion indeed.
>
> What is an application? What you pay for, when you buy software?
> Aren't you paying for the right to use the application? How are taxes
> collected on rights to use? Who is taxed -- the party that gives the
> right, or the party that receives the right?
>
> Does the application have physical location? Does it reside on my iPad
> flash storage and if it does, can I take it from there and put it in
> another physical place? Or does it reside "somewhere" in the Internet
> cloud?
>
> What if the application is web based, "resides" and "runs" somewhere,
> but I "use" it here?
>
> Could you also explain to me who collects taxes when:
>
> Apple in California sold me the application.
> I purchased it while in Oslo (Norvay), then used it while staying at
> the Frankfurt (Germany) airport and continued to use it back home in
> Varna (Bulgaria).
>
> Internet does not have 'place' and it also does not do anything with
> 'physical' objects. Both these things are the foundation of the
> current taxation system.
>
> Daniel __________________________________________________________
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