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

Wed Sep 28 11:50:42 EDT 2011

In message <4E8338DF.7020708 at cafonso.ca>, at 12:10:23 on Wed, 28 Sep 
2011, Carlos A. Afonso <ca at cafonso.ca> writes
>I think we are talking about travelling bits instead of just bits per se? :)

Probably. I've got eight terabits rotating on a hard drive here, I don't 
think I can afford that otherwise.

And the rate in the paper might look small (1 millionth of a cent per 
bit), but an hour of digital TV is 350MB x 8 = 2,800 million bits, and 
2,800 cents is $28!

Of course, you'd have to make sure each bit wasn't inadvertently taxed 
twice on its journey, so we need to invent something akin to "stamp 
duty", where once the bit has been taxed it's marked as paid up. Doing 
this per byte sounds best, so you need an International Treaty to 
declare that every byte now has nine bits - the eight bits of data and 
the one "stamp duty bit" which says bit-tax has been paid.

It would obviously have to be an offence against local tax law to set 
that bit unless you are properly authorised (otherwise you could set the 
bit yourself and escape the tax), but routers on national borders would 
reset the bit allowing each country to tax each byte as it flowed 
through.

Roland.
(Acknowledgement to rfc3514)

>--c.a.
>
>On 09/28/2011 09:29 AM, Lee W McKnight wrote:
>> I have to agree with Daniel, this has been talked about forever and 
>>is just...as Spock would say, not logical.
>>
>> There is no shortage of bits, there is no government allocation of 
>>bits, there is no public bit resource.
>>
>> Which is not to say, as was said in the early days of the net ' a bit 
>>is a bit.'
>>
>> All bits are not created equal, and some are worth way more than others.
>>
>> Eg, bits helping Warren Buffett keep track of his money are worth 
>>more than ones..tracking my debts ; )
>>
>> Since some bits - in transit -do cross public rights of way, or 
>>otherwise use public resources like spectrum, there are - taxable - 
>>nodes/transit points out there.
>>
>> But a generalized tax on digital 'traffic' would mean for example 
>>that digital tv would be taxed out of existence, since hdtv hogs - bits.
>>
>> OK, assuming we kill hdtv, then we are left with all those Youtube 
>>videos which are also - wasting scarce bits? Or just enabling us to 
>>waste our time?
>>
>> Ok, maybe those are not the worst outcome imaginable, but still...
>>
>> Lee
>> ________________________________________
>> From: governance at lists.cpsr.org [governance at lists.cpsr.org] On Behalf 
>>Of Daniel Kalchev [daniel at digsys.bg]
>> Sent: Wednesday, September 28, 2011 5:00 AM
>> To: governance at lists.cpsr.org; michael gurstein
>> Cc: 'Economics of IP Networks'
>> Subject: Re: [governance] Can a bit tax bring a New Wealth of Nations?
>>
>> On 28.09.11 11:26, michael gurstein wrote:
>> An interesting suggestion that my friend Arthur Cordell has been 
>>advocating here in Canada for a number of years.
>>
>> M
>> [...]
>> 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?
>>
>> This was tried a number of times, in different forms in the 
>>'traditional' telecoms and with the rise of Internet it was proved 
>>absurd.
>>
>> Just who the 'carriers' are? Do we tax international traffic only? Or 
>>do we tax your home wireless network? What about the bluetooth traffic 
>>between your mobile phone and your laptop?
>>
>> Taxing traffic effectively means you punish the more innovative and 
>>growing infrastructures and encourage limiting connection speeds and 
>>eliminating protocols that generate excessive traffic. We went trough 
>>great pains for many years to just ensure the opposite...
>>
>> One example of already taxing traffic is the radio frequency 
>>allocation. You pay taxes for your allocated frequency band. While it 
>>is possible to use higher density encoding to pack more (data) 
>>bandwidth into the same frequency band, the difference is not much 
>>(and the cost increases dramatically) because mathematical/physical 
>>limits come into play. Only by introducing 'shared' and 'free for all' 
>>frequency bands it was possible to pack lots and lots more (data) 
>>bandwidth in wireless networks.
>>
>> Therefore, wireless and satellite links already do pay taxes for 
>>their bits. It is only fiber and copper lines that do not pay (yet). 
>>These are considered, by most regulators to not be limited resource.
>>
>> It is like paying a tax for the light reaching one point from another...
>>
>> Daniel
>>
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-- 
Roland Perry
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