[governance] FW: TP: city government exercising policy on Google Applications / consumer rights / Consumer Protection Act / trial period

Kerry Brown kerry at kdbsystems.com
Wed Jul 13 14:40:39 EDT 2011


Hello Mike

I've posted a response to Phillippe that covers some of the points you
raise.

In essence I am philosophically opposed to governments having a mechanism
that allows them to track Internet users. I believe that the taxation
issues are one strategy of many that they are using to erode individual
user rights and get control of the Internet. I understand and respect that
many people don't share my beliefs on this.

I'm also something of a pessimist regarding the effectiveness of
international bureaucracies.

Kerry Brown

On 11-07-13 8:31 AM, "michael gurstein" <gurstein at gmail.com> wrote:

>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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