[governance] Can a bit tax bring a New Wealth of Nations?

[michael gurstein]

An interesting suggestion that my friend Arthur Cordell has been advocating
here in Canada for a number of years.
 
M
 
-----Original Message-----
From: futurework-bounces at lists.uwaterloo.ca
[mailto:futurework-bounces at lists.uwaterloo.ca] On Behalf Of Arthur Cordell
Sent: Tuesday, September 27, 2011 6:34 PM
To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION';
stuff-it at vancouvercommunity.net
Subject: Re: [Futurework] McKinsey Quarterly article: Measuring thevalue
ofsearch



 

COLUMN: Can a bit tax bring a New Wealth of Nations?

By Ottawa Business Journal Staff <mailto:info_obj at transcontinental.ca>
Sun, Dec 29, 2002 11:00 PM EST



At a rough guess, the public sector needs another $20 billion a year to meet
the pressing needs of health, education and defence, and to renew the
crumbling infrastructure that carries our traffic, carries off our sewage,
delivers our water and provides many other essential services. Maybe $30
billion. A lot, anyway. 

Where's it going to come from? Increased income tax? This isn't a very
desirable option, either for the taxpayer or for the economy, which has to
maintain some semblance of equilibrium with low tax competitors, such as the
United States of Affluence. A jump in GST from seven per cent to double
digits? Not a big favourite among politicians, who would find themselves en
masse back in the private sector the first election following such a move. 

There's no painless way to raise the needed funds. Or is there? One way that
has the advantage of being scarcely visible has been suggested by my friend
Arthur Cordell, an advisor to Industry Canada and originator many years
thence of the "conserver society" tagline, precursor to "sustainable
development." His more recent contribution to socio-economic discourse has
been the notion of the "bit tax." 

"The new wealth of nations," Arthur points out, "is found in the trillions
of digital bits of information pulsing through global networks. These are
the physical/electronic manifestations of the many transactions,
conversations, voice and video messages and programs that taken together
record the process of production, distribution and consumption in the new
economy." 

If there's a new economy, there should be a new tax base. To follow the
information highway analogy, it would be similar to a gasoline tax, or a
toll on bridges or highways. Why not tax digital traffic, asks Arthur? 

"Whether the digital bit is part of a foreign exchange transaction, or a
business teleconference, check clearance information, or an ATM transaction,
each bit is a physical manifestation of the new economy at work. So let's
imagine a 'bit tax.' Automatically metered, it will cause fewer collection
problems than most other direct or indirect taxes. Collected by the telecom
carriers, satellite networks and cable systems, revenues would flow directly
to the revenue service of the respective country." 

There are a lot of questions to be answered, of course. Is a bit tax
progressive or regressive? Will it be absorbed by the carriers or passed on
to consumers? Should lower rates apply to some heavy traffic items such as
digital movies downloaded to the home? Can one nation bring in a bit tax or
does it require international collaboration? 

The design of the Internet makes it impossible to determine where someone
making an electronic purchase is located. With a typical mail-order
purchase, the product is shipped somewhere. But if the information is
downloaded from an Internet site, the seller may have no idea of its
destination. And where does the merchant reside? 

Where he or she actually has an office or where the computer server is? It
would seem that international cooperation will be essential to collecting
and distributing a bit tax, which should give considerable comfort to the
vanguard of the world government movement. 

As Arthur says, "The point is to begin a discussion on the sort of new taxes
appropriate for a new economy. A bit tax can lead to the monetization of all
productivity. One result: economic growth numbers will more accurately
reflect the productivity advances brought by information technologies. With
monetization will come higher gross domestic product and higher revenues to
be used in a variety of ways. 

"New revenues can be used for schools, parks, health care, to re-train some
for new jobs and, for those who cannot be retrained to provide a continuing
flow of income that allows displaced workers to maintain their dignity - and
purchasing power - in the new economy. This last point is important since
purchasing power is needed to maintain effective demand in our economies if
we are to avoid chronic economic recessions or worse. 

"The bit tax may be one way to more fully distribute the benefits of the new
economy. One way for the productive power of information technology to bring
with it a New Wealth of Nations." 

 

 

From: futurework-bounces at lists.uwaterloo.ca
[mailto:futurework-bounces at lists.uwaterloo.ca] On Behalf Of michael gurstein
Sent: Tuesday, September 27, 2011 9:09 PM
To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION';
stuff-it at vancouvercommunity.net
Subject: [Futurework] McKinsey Quarterly article: Measuring the value
ofsearch

 

Measuring the value of Internet search

Although the word "Google" has evolved from the name of an Internet search
company into a verb understood almost everywhere on Earth, the economic
value of Web searches has long remained a mystery, approached through
inexact or tainted metrics such as the number of searches undertaken or ad
revenues reported by search companies themselves. A new McKinsey study takes
a wider view. For a truer reckoning of the way the Web turns our curiosity
into a powerful economic force, read "
<http://e.mckinseyquarterly.com/133a7f62flayfousiboeswxyaaaaabxlwp4gsptvgbiy
aaaaa> Measuring the value of search."


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