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If IP Is Property, Where Is the Property Tax? 691

Posted by kdawson
from the making-the-world-safe-for-mickey dept.
nweaver writes "In a response to the LA Times editorial on copyright which we discussed a week ago, the paper published a response arguing: 'If Intellectual Property is actually property, why isn't it covered by a property tax?' If copyright maintenance involved paying a fee and registration, this would keep Mickey Mouse safely protected by copyright, while ensuring that works that are no longer economically relevant to the copyright holder pass into the public domain, where the residual social value can serve the real purpose of copyright: to enhance the progress of science and useful arts. Disclaimer: the author is my father."
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If IP Is Property, Where Is the Property Tax?

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  • Wow... (Score:5, Interesting)

    by milsoRgen (1016505) on Tuesday February 26, 2008 @09:38PM (#22567450) Homepage
    On the face of it, I love that idea. The bigger question would be how do you determine the value of the IP to assess it for taxation.
    • Re: (Score:3, Interesting)

      by corsec67 (627446)
      The value of anything and everything that includes the specific IP?

      Or would having the trademark of every character in a cartoon be worth the value of the whole cartoon be a problem?

      How else could you start dividing it up?
      • Re:Wow... (Score:5, Interesting)

        by Anonymous Coward on Tuesday February 26, 2008 @10:06PM (#22567744)
        I would imagine it goes like this: You have some IP you want protected. You file for something to protect it (new something, copyright, whatever). You claim a value. You make up the value - whatever you want to say it is. You are then taxed on that value. The only caveat is that if someone wants it from you they can buy the whole damn thing from you for the price you claimed it was worth - UNLESS you immediately raise the value and pay a penalty for undervaluing it.
        • Re:Wow... (Score:5, Interesting)

          by milsoRgen (1016505) on Tuesday February 26, 2008 @10:20PM (#22567898) Homepage
          How about every 10 years said item would go up to the auction block, if a competitor out bids you. They can claim the IP, if no one wants to compete the original value must be paid otherwise IP goes into public domain. And for IP that drastically changes in value in a short time, a petition could be filed that if properly cause is shown an auction could be triggered early.

          Or something, really I'm thinking any alternative more sensible than the life+70 would be good.
          • Re:Wow... (Score:5, Insightful)

            by Jester998 (156179) on Tuesday February 26, 2008 @11:29PM (#22568572) Homepage
            Under that system, where would the money from the auction go? To the government? To the original inventor? To the previous owner of the IP?

            There are flaws with that system no matter how you look at it:

            Some dude in a garage invents something amazing, makes a few million bucks selling it. In 10 years time, maybe it's become even more relevant (ready for mass adoption), so $megaCorp steps in and 'bids' a few BILLION on it. Original inventor doesn't have that kind of capital, loses rights to $megaCorp. But the rights are now transferred to someone else for their exclusive use. The small guy gets locked out, and the public interest still isn't satisfied.

            Under your other scenario ("for IP that drastically changes in value in a short time, a petition ... triggered early") is even WORSE, because $megaCorp could argue that the IP's value has changed drastically in the first 6 months and squash the original inventor before he's had a chance to reap his reward.
            • Re:Wow... (Score:5, Insightful)

              by Fourier404 (1129107) on Tuesday February 26, 2008 @11:53PM (#22568858)

              Under that system, where would the money from the auction go? To the government? To the original inventor? To the previous owner of the IP?
              I don't see how you could possibly think that it would go anywhere but to the previous owner. Is there any instance where the sale of something at an auction (a non charity one, at least) leads to somebody other than the previous owner getting the money?

              With the scenario of $megaCorp, the original owner could bid however much he wants (ten trillion trillion), and then he'll pay himself (so he doesn't actually need to have any money). However if he does that, his taxes will go way up, and he has to decide if the IP is really worth that much, and if it really is worth a BILLION dollars, and no more, he'll sell. If he's emotionally attatched to it and doesn't want it to fall into the hands of $megaCorp, he can just release to the public domain.
              • Re: (Score:3, Informative)

                by digitalunity (19107)
                Is there any instance where the sale of something at an auction (a non charity one, at least) leads to somebody other than the previous owner getting the money?

                Yes. All land and property seized and auctioned as a result of a criminal conviction has proceeds remitted back to the government, less any real debts such as taxes owed or mortgages that need paid much like a bankruptcy proceeding. A good example would be conviction under RICO statutes, drug smuggling and tax evasion. Once money is collected for the
                • Re: (Score:3, Insightful)

                  by Fourier404 (1129107)

                  All land and property seized and auctioned as a result of a criminal conviction has proceeds remitted back to the government

                  Became the government's right there, so they kept the money when it was sold.
                • by waterbear (190559) on Wednesday February 27, 2008 @07:19AM (#22571526)
                  (Well, there's already been a flood of posts on this one, but anyways .... )

                  [1] FWIW I think the idea of a copyright tax is a good one, for the sake of making commerically unimportant copyrights available.

                  [2] The tax doesn't have to be a big one to be effective, and any realistic tax would have to be on a uniform basis and a reasonable level to be administratively workable. Patent renewal fees already exist and are like that, and they do result in many patents being abandoned to the public domain before their term is up.

                  [3] An additional advantage of a copyright tax would be that in the case of items that might look like 'abandonware' but are not, the tax register would help people's efforts to find the person claiming the copyright, if they want to fix up any kind of proper licensing permission.

                  [4] A big difficulty in the way of implementation, is that copyright law conditions are now set by international treaty, the Berne Convention. This says that copyright has to be available without formality. So it isn't any longer up to Congress just to alter the law, unless they also want to leave (denounce) the Berne Convention (this would result in lack of mutuality of copyright protection between the US and just about every other country, an inconvenience and cause of loss and expense to copyright holders that caused the US to join the Convention in the first place.)

                  So, international negotiations would be needed to insert some kind of 'sunset' clause into the Berne Convention. Or else, the tax could perhaps be brought in for some other effect, short of ending the copyright, like maybe avoiding a presumption of licensing-as-of-right: this could be legislatively created for untaxed copyright works. (But I'm not sure that even that would be compatible with the existing Berne Convention anyway.)

                  [5] So, all in all, the idea sounds good, but is probably impractical until the international climate (in which the US govt currently has a big influence) moves away from the tendency to tighten IP nooses, and starts loosening up.

                  -wb-
        • Re:Wow... (Score:5, Interesting)

          by evanbd (210358) on Tuesday February 26, 2008 @10:32PM (#22568030)

          I've been advocating that exact idea for a while, with one slight change: if that happens, the IP in question goes into the public domain instead of to the purchaser.

          There are some other things I'd change, too -- the first [small number] years should be free, for starters, to make sure that creators who don't have the budget but have a valuable idea have time to do something with it. An artist friend of mine suggested, and I'm inclined to agree, that artwork that isn't sold (ie, original paintings) should be protected for an extended period without cost. There are endelss details, but in general I love the idea...

          • by sentientbrendan (316150) on Tuesday February 26, 2008 @11:27PM (#22568554)
            >I've been advocating that exact idea for a while, with one slight change: if that happens,
            >the IP in question goes into the public domain instead of to the purchaser.

            GPL and public domain are not the same thing. Linus owns parts of Linux and holds a trademark on Linux in some countries. He could not afford to pay such taxes, so a company like say microsoft could come along and use his code under these laws.

            In general, these laws make no sense and would hurt open source developers even more than closed source developers.

            Finally, these are in no way analogous to property tax because property tax is just on land, not on the various other things you own. Also the federal government doesn't even collect property tax. It's a stupid idea that would hurt everyone.
            • by Kadin2048 (468275) <slashdot.kadinNO@SPAMxoxy.net> on Wednesday February 27, 2008 @12:06AM (#22568986) Homepage Journal

              property tax is just on land, not on the various other things you own
              Yeah, tell that to my Personal Property tax bill. If you're in a locale that doesn't tax vehicles and other high-value items of personal property, consider yourself lucky. Most places have them; some tax specific items (vehicles, boats, RVs), while others just set a minimum dollar value for taxation and go after all durable goods beyond that point, generally with exceptions granted for non-durable and household goods.

              I've lived in states where property taxes were aggressively enforced by municipalities on such varied things as artwork, out-of-state or un-plated vehicles (even if it was never registered or driven on public roads), even office furniture and equipment. In the U.S., sometimes they're administered -- and therefore vary -- at the state level, in other areas it's devolved down to the city/town/county level.

              Some states (Florida that I'm aware of specifically) had/have an "intangible personal property" tax, specifically on things like stocks, bonds, bearer notes, money market funds, pretty much anything that's worth anything. Florida's was recently repealed, but it's not like the concept is totally foreign or anything.
        • Re:Wow... (Score:5, Insightful)

          by KillerCow (213458) on Tuesday February 26, 2008 @10:33PM (#22568036)
          Sounds like a great way for big corporate interests to stamp out little competitors. Just force them to overvalue their IP (so they are at a disadvantage in servicing it) or buy it out from under them.
          • by Harmonious Botch (921977) * on Wednesday February 27, 2008 @12:04AM (#22568966) Homepage Journal

            Sounds like a great way for big corporate interests to stamp out little competitors. Just force them to overvalue their IP (so they are at a disadvantage in servicing it) or buy it out from under them.
            That is a very valid criticism. So let's see if I can make an improvement...
            Instead of having the assesment burden on the owner of the IP, let's put it on the collector of taxes, or the buyer of the IP.

            Every idea is assumed to be worth a nominal hundred bucks until the govt tax collecting agency can find a bidder. Once they have a notarized bid ( maybe with some percentage deposit ) then they go to the owner of the IP and inform him that his idea is now worth more than a hundred dollars, and he should start paying more taxes on it.
            The IP owner then has two choices: He can assent and start paying the tax, or he can agree to sell it. If he agrees to sell it, the govt collects the money, gives it to the IP owner. They also collect a few percent fee for their services, so that the whole process is fee-based rather than taxpayer-supported.

            If the owner of the IP is broke, he need not submit just for financial reasons. The 'notice of value' is a negotiable item, and a bank would be willing to accept it as collateral on a loan - because they can cash it in if the loan defaults. The big corporation would have to be careful about trying to squeeze the little guy, for in doing so, they give him collateral to start a competing business with the IP.
          • Re: (Score:3, Interesting)

            by bendodge (998616)
            No no, this is simple. Instead of forcing them to offer it for sale at that price, they are required to use the same value they are taxed on for court cases.

            So if $megaCorp sues someone for patent or copyright infringement, they will be taxed on the same value that they use for calculating damages.

            This is sounding better all the time!
        • Re:Wow... (Score:5, Insightful)

          by bryanzera (539455) on Tuesday February 26, 2008 @10:37PM (#22568086) Homepage

          The only caveat is that if someone wants it from you they can buy the whole damn thing from you for the price you claimed it was worth - UNLESS you immediately raise the value and pay a penalty for undervaluing it.
          If IP is, in fact, property, then the property holder can choose not to sell their property.
        • Re:Wow... (Score:4, Informative)

          by Siridar (85255) on Tuesday February 26, 2008 @10:51PM (#22568214)
          Please, if you're going to use the ideas of another person, at least credit them for it. In this case, you're quoting Robert Heinlein's idea for property tax in his novel "The Number of the Beast" - specifically, when the group of bold adventurers go to a alternate universe where land tax was assessed in that manner.

          If I recall correctly, it was put thus:

          The owner appraises their own property, and pays tax on that value. However, anyone can come along and against the owners wishes buy the property - at which point the owner has two options: sell, or raise their valuation of the property to a price so high that nobody would want to buy it. However if they did this, they would be required to pay five years back taxes of the new, higher value.

          One of the characters in the book (Zeb? I can't recall...) when it was pointed out to him that this was unfair, replied with "if some fool wants 5 hectares of useless, hilly land, we'll simply take his money and buy elsewhere..."
          • Re:Wow... (Score:5, Interesting)

            by Xanius (955737) on Tuesday February 26, 2008 @11:16PM (#22568442)
            Because as everyone knows, no two people could ever possibly have the same idea independently....

            I think it would be valued at whatever damages you want to claim when you sue someone over it. That'll keep the number of ridiculous damage claims down.
        • Re: (Score:3, Insightful)

          by Z34107 (925136)

          You claim a value. You make up the value - whatever you want to say it is. You are then taxed on that value. The only caveat is that if someone wants it from you they can buy the whole damn thing from you for the price you claimed it was worth

          I liked this idea a lot, until I realized that this would concentrate all the IP rights - patents, copyrights, the whole shebang - into the hands of the super-rich. Neither Joe Q. Inventor working in his garage or Sally S. Songwriter are going to be able to pay th

        • Re: (Score:3, Insightful)

          by Prof.Phreak (584152)
          Similarly, if someone steals your IP, they can only be sued upto the amount claimed.
        • Re: (Score:3, Insightful)

          by i_b_don (1049110)
          yeah... this is an interesting idea and all... but don't you think that if we had a government that would make laws for public benefit, when it came to copyright, that they would just write a law to change the copyright time to 20 yrs or something beneficial to society?

          The reality is that we have a corrupt form of government in which money can buy laws. Since the "public domain" has no money it will therefore get screwed every single time.

          Don't get me wrong, I don't want to take the wind out of anyone's sa
      • Re: (Score:3, Interesting)

        by LithiumX (717017)
        The core problem with IP is that it is often based on a simple easily-replicated idea (one-click interfaces, etc) or it's protection lasts longer than is in the common good (ie 100+ year copyrights).

        A tax on IP is a novel idea, but not a good one, for reasons abundantly explored in other posts.

        There are three changes that, in my not-so-humble opinion,

        First change: Drop patents on software, entirely. Patents on visible software methods simply should not apply. It should remain under copyright (fo
    • Re:Wow... (Score:5, Insightful)

      by colmore (56499) on Tuesday February 26, 2008 @09:44PM (#22567512) Journal
      I propose that the RIAA and MPAA and the BSA file the ridiculous figures they've been claiming all these years.
      • Re:Wow... (Score:5, Interesting)

        by srmalloy (263556) on Tuesday February 26, 2008 @11:22PM (#22568498) Homepage
        No, no -- they don't need to file anything. Audit them. If the RIAA/MPAA is accurate about the value of the 'loss' from each individual instance of unauthorized copying, then they are, by their own admission, guilty of having failed to declare the true value of their assets as capital gains. It could wipe out the National Debt if the IRS could collect on all the back taxes...
        • Re: (Score:3, Interesting)

          by bagsc (254194)
          1) Their claims are not based on the 'loss' - they're based on statute. IRS has no authority to tell Congress how to write the DMCA.
          2) Pretend they were losses. There are far more "losses" than there are "gains" today for media companies - more copies are illegal than legal.
          3) If we did treat these "losses" as taxable, they would REDUCE the tax owed.
          4) Pretend it increased taxes. The media companies aren't worth much. Disney is worth $60 bil before it goes bankrupt, Time Warner is worth about $60 bil, N
        • by patio11 (857072) on Wednesday February 27, 2008 @04:12AM (#22570594)
          Repeat after me: you don't have to declare the "true value of your assets", which is an entirely imaginary notion, except in the tax year when you have *realized* capital gains *by selling the asset*. Lets say that four friends and I get together to form the Pasty-Faced White Guy Boy Band. We write our single "I Cheated On You But Now I'm Sorry Please Take Me Back". It costs us nothing to write, so the cost basis on that song's copyright and associated IP is zero. We perform it for a while, and release it to the Internets, to the adoration of millions of spurned women everywhere. I receive an offer from Big Record Company to purchase the rights to the song, in perpetuity, for $1 million dollars. I reject it.

          Where do I put the million dollars on my tax return? Nowhere. No income means no income tax.

          Now, had I accepted the offer, I would have realized capital gains of $1 million (probably split five ways), less the $0 cost basis in ICOYBNISPTMB. That would require me paying taxes -- likely at the long term capital gains rate, not as income, in the most plausible reading of my imaginary scenario.

          Now, let's say that I reject the $1 million offer, and then subsequently sell to Timmy The Two Bit for $50,000 to prevent the bank from kicking me out of my house. In this case, despite the fact that you might feel my song is still worth $1 million, I would be assessed taxes on only $50,000 of capital gains. Even if the song made me a million in sales in the month before the sale, it would still be *fairly valued* at $50,000 after the sale actually takes place, assuming I am not engaging in tax fraud outside the scope of this hypothetical (for example, by doing a transaction which is not at "arms length" -- perhaps selling to a confederate with the promise to buy back in the next tax year and benefit somehow from a stepped up cost basis).

          • by DougWebb (178910) on Wednesday February 27, 2008 @09:44AM (#22572354) Homepage

            That's an accurate description of Capital Gains taxes, but the discussion is about Property taxes. Maybe you don't pay property taxes where you live, but in many US states every year you have to pay a percentage of the assessed value of property you own as a tax. For example, in the NJ town where I live, I currently pay 16% of the assessed value of my home and land. (66% of that goes to the local school board, 20% goes to the county, and 14% goes to my town.) Property values are just being reassessed now after 25 years; with the new assessment, the tax rate will probably drop to 2.5% to 3%.

            So, every year I pay 3% of the approximate value of my property, whether I sell it or not. No mansion for me; even if it was given to me for free, I couldn't afford to own it.

    • Re: (Score:3, Insightful)

      by webmaster404 (1148909)

      On the face of it, I love that idea. The bigger question would be how do you determine the value of the IP to assess it for taxation.

      No the real question would be how much would you have to pay for that comment you just wrote. Because you have that piece of IP assigned to you you now have to pay say a $.01 tax to keep that registered to you. Im sure that it won't be that extreme if it does get implemented but governments are generally bad at keeping the interests of the people.

      • Re:Wow... (Score:5, Funny)

        by dgatwood (11270) on Tuesday February 26, 2008 @09:58PM (#22567688) Journal

        No, no, no. It's two cents. Two cents.

      • Re:Wow... (Score:5, Insightful)

        by rgmoore (133276) <glandauer@charter.net> on Tuesday February 26, 2008 @10:16PM (#22567858) Homepage

        No the real question would be how much would you have to pay for that comment you just wrote.

        The answer is easy: nothing. You're never required to pay the property tax. It's just that you lose your copyright if you don't pay. Since I don't really care about the value of my slashdot comments, I wouldn't pay and they'd lapse into the public domain.

        That's exactly the point. Things like blog comments that have little monetary value to their creators shouldn't be protected indefinitely. Neither should books that their publishers care so little about that they're allowed to go out of print. They should move into the public domain so that other people can make use of them without fear of lawsuit.

    • Re:Wow... (Score:5, Insightful)

      by FSWKU (551325) on Tuesday February 26, 2008 @09:46PM (#22567550)

      The bigger question would be how do you determine the value of the IP to assess it for taxation.
      I'd be all for a percentage of whatever revenue the copyright has brought to you the preceeding year. Failing to pay said tax would immediately cause the imagin...err...intellectual property to lapse into the public domain.
      • Re:Wow... (Score:4, Insightful)

        by Anonymous Coward on Tuesday February 26, 2008 @09:57PM (#22567676)
        That doesn't solve the problem addressed... people keeping copyright on things that are no longer economically viable to them.

        Maybe require you to file official copyright claims on anything before you can defend it (automatically approved, but chalangeable) and then a small flat fee to maintain that copyright until you declare it public domain (a decision that you obviously can't recant) in addition to a percent of your income based on that copyright as property tax? Or maybe a tax on how much total you've made on that copyright, or some assessment of its current market value if you were to sell it (that'd be hard to do...) until you declare it public domain? (if the former, that'd certainly be an incentive to declare something public domain once you stopped really using it...)
        • Re:Wow... (Score:5, Insightful)

          by dpilot (134227) on Tuesday February 26, 2008 @10:26PM (#22567964) Homepage Journal
          The government has all sorts of "innovative" methods of taxation.

          For the case you mention, I can think of a very simple solution - some sort of "minimum IP tax". Hold the IP, pay at least the minimum tax. As your revenue stream rises from zero, you continue to pay the minimum tax, until the taxation on your revenue stream exceeds that minimum. You know, pay the greater value.

          Then there needs to be a process for releasing content into the public domain, so you can prove it to the Tax Man.

          Plus it may sound biased, but there probably needs to be some sort of "equivalent to public domain" status for open source licenses. After all, the purpose of public domain is to make the IP usable by others as a foundation for further work. But then again, that also means that the government would probably meddle in defining open source licenses, at least for tax purposes. I could readily foresee bsd licenses passing the muster, but perhaps not the GPL, though maybe the LGPL. Remember, one thing the US government *likes* is businesses making money, and if you assume that closing the source is *necessary* to making money, as some very powerful business players do, then the gpl can be considered hostile toward that end.
    • by qbzzt (11136) on Tuesday February 26, 2008 @09:47PM (#22567554)
      I think Heinlein had the solution to that (he used it for real property). You declare a value, you pay taxes based on that, and anybody can force you to sell it to them at that price.
      • by Atlantis-Rising (857278) on Tuesday February 26, 2008 @10:06PM (#22567746) Homepage
        That sounds similar in concept to a shotgun buy/sell [wikipedia.org] (for corporate shares).

        It sounds great in theory. In practice, however, it would be untenable. Linus would never be able to afford the property taxes on Linux, and as a result Microsoft with its billions in cash reserves would be able to buy it for a steal (unless of course Linus let it into the public domain, a decision I'm not even sure he could make.)

        Linux is obviously an example, and perhaps a bad one. But a shotgun buy/sell system as you are proposing dramatically favors those with larger revenue streams and ready cash reserves.

        • Re: (Score:3, Interesting)

          by rmerry72 (934528)

          But a shotgun buy/sell system as you are proposing dramatically favors those with larger revenue streams and ready cash reserves.

          This is the crux of any economic solution to the IP problem. Large amounts of cash have a significant advantage in any non-proportional taxation system. The tax has to be proportional to the value of the item and the value of the owner. Linus would pay $0.02 for his IP tax on Linux, Microsoft should be forced to pay, say $200,000,000.

          Not equitable I hear? Yes it is, but it blo

      • What if you value it at an infinite value?

        You'd have to pay an infinite amount of money in tax (any percentage of infinity is infinite), but then you'd write off that expense, resulting in an infinite tax write off, bankrupting the gov't.

        Works for me!

        RS

      • if you were valuating property. The question in the article is an interesting one, but only as far as it (and the discussion on valuation here) shows the absurdity of the proposition that copyright and related rights can, or should be treated as "property".

        In fact, the basic concepts and concerns about copyright and related rights haven't changed much since the legislation was first introduced. those rights are still best explained by the original contract -- a limited in time monopoly to the author (so tha
    • Re: (Score:3, Interesting)

      by XaXXon (202882)
      I agree with some others about making the creator declare a value on which they pay tax. However, instead of making this a value that you can buy it from someone for, you could make it the amount you could sue someone for - or for a fixed licensing / royalty rate.

      Of course this destroys copyleft. It asserts that the value of a work is directly related to its monetary value. If you're not selling it, it must not have value (unless you have the money in the bank to keep paying the tax without income from t
    • Re:Wow... (Score:5, Interesting)

      by Radical Moderate (563286) on Tuesday February 26, 2008 @09:53PM (#22567638)
      "The bigger question would be how do you determine the value of the IP to assess it for taxation."

      I agree, assessing intellectual property values would be a huge PIA.

      On the other hand, a simple, flat, renewal fee would have the same effect. Or perhaps a sliding scale, so that the longer you hold a copyright the more expensive it becomes. Copyrights that weren't producing revenues would be released, and Disney could keep Mickey forever. Might not generate the billions in tax revenues that the author envisions, but it would get more works in to the public domain.
      • Re: (Score:3, Insightful)

        by mysticgoat (582871)

        On the other hand, a simple, flat, renewal fee would have the same effect. Or perhaps a sliding scale, so that the longer you hold a copyright the more expensive it becomes. Copyrights that weren't producing revenues would be released

        This would destroy the GPL and probably all other copyright licenses that support FOSS.

        I do not think that would be A Good Thing To Do.

        • Re: (Score:3, Interesting)

          by Waffle Iron (339739)

          This would destroy the GPL and probably all other copyright licenses that support FOSS.

          I doubt it would actually matter much, given that most software needs to be continuously updated to remain relevant. Each update would have a fresh copyright. Proprietary "freeloaders" would necessarily be stuck with a rather stale public domain fork, and would have to independently author and maintain any updates for the software. That major hassle would probably deter such proprietary forks in most cases.

      • Re:Wow... (Score:5, Interesting)

        by Anonymous Coward on Tuesday February 26, 2008 @11:19PM (#22568464)
        Perfect.

        How about $0.01 for the first year, and it doubles every year after that?

        So, keeping a copyright for 10 years costs only $10.24, but keeping it for 16 years is $655.36, 20 years is $10485.76

        After 32 years, it's $42,949,672.96

        After 64 years, it's $184,467,440,737,095,516.16!!!

        Even the poorest small guy can afford to keep his Copyright for 10 years, but nobody will have the money to keep creative works out of the public hands for 50+ years.

        Again, this seems like the perfect system.
  • by cmay (687134) on Tuesday February 26, 2008 @09:40PM (#22567462) Homepage
    Real property (real estate) has property tax, but no one taxes you for personal property.

    I am sitting in a chair, no one is going to TAX me on the fact that I own some chair (personal property).

    Weak argument.
    • by Zondar (32904) on Tuesday February 26, 2008 @09:42PM (#22567486)
      Ad valorem taxes, anyone?

      http://en.wikipedia.org/wiki/Ad_valorem/ [wikipedia.org]
    • by Above (100351) on Tuesday February 26, 2008 @09:44PM (#22567518)
      This is not quite true.

      Many states have personal property tax, for instance Virginia taxes your car, boat, RV, and things like that every year.

      However, I don't think the worry is about personally owned IP, but rather corporate. A very large number of business jurisdictions tax businesses based on their owned property. As one property tax official told me in one locale, "if it's necessary to run your business it must be listed, and we tax it." If that's the business attitude of the tax man, I think the editorial is spot on.
    • Re: (Score:3, Informative)

      by Chris Mattern (191822)
      Here in Virginia you also pay property tax on your car; I believe that's also the case in some other states. But, yeah, even here you don't pay taxes on personal property in general, just real property and cars.
    • by hcmtnbiker (925661) on Tuesday February 26, 2008 @10:35PM (#22568058)
      I am sitting in a chair, no one is going to TAX me on the fact that I own some chair (personal property).

      That's not exactly true. If you're sitting in a car seat, then you're likely being taxed on it. Some states would even tax you for what's in your home, New Hampshire comes to mind, when I lived there, every 5 years or so they would come by and assess your house, now you could not let them inside, but this would cause them to estimate something that's probably higher then your house and everything that's in it. But they would always ask to see what's inside your house, and if you had say i really nice home theater system, yea that adds to the assessment. \
    • Re: (Score:3, Interesting)

      by Eskarel (565631)
      It's more similar than you'd think, logically speaking at least.

      As far as I recall, in the US at least, all land is actually owned by the government(on behalf of the people). The deed grants you specific monopoly rights to the land. Theoretically speaking the government can void your deed at will, though for obvious reasons they rarely do.

      IP is the same sort of situation, all ideas belong to the commons, but the government grants you monopoly control over certain rights to that idea. Similarly copyright in

  • Why? (Score:5, Insightful)

    by webmaster404 (1148909) on Tuesday February 26, 2008 @09:40PM (#22567466)
    Its easy why it isn't, almost everyone owns some piece of IP. For example, this comment, it could be considered IP, now should I have to pay essentially a fee on that? No. Or what about a program I wrote, should I have to pay a tax to license it under say the GPL? What really needs to happen, is lower copyright terms and the abolishment of the "forever copyright" and also, what in the world does the government do with all their copyright fees?
    • Re:Why? (Score:4, Insightful)

      by Breakfast Pants (323698) on Tuesday February 26, 2008 @09:43PM (#22567498) Journal
      >For example, this comment, it could be considered IP, now should I have to pay essentially a fee on that?

      No, but it should slip into the public domain unless you do.
      • Re: (Score:3, Insightful)

        by webmaster404 (1148909)

        No, but it should slip into the public domain unless you do.


        So in other words only the rich now can make money on anything that would be considered IP such as books, poems, songs, software, etc. Because the larger companies can now buy the rights to your public domain IP and sell it? Yes that will probably be illegal but if its public domain its not like you have the rights to complain.
    • Re: (Score:3, Insightful)

      by CastrTroy (595695)
      Exactly bring back the 17 years of copyright with no renewal. I could even argue that since works can be distributed much more quickly than 2 centuries ago, that works should be covered by copyright for an even shorter period. After 10 years your work should go into the public domain. If you haven't generated enough cash by that point, you're probably never going to generate any cash with that work.
    • Re:Why? (Score:5, Interesting)

      by CorSci81 (1007499) on Tuesday February 26, 2008 @09:53PM (#22567628) Journal
      Perhaps the solution is some sort of automatic grace period? For instance, anyone can maintain copyright on a work for say a timeperiod of 1-year tax-free, but after that they either have to start ponying up (because it's economically relevant enough to care) or lose the copyright. The problem I foresee is figuring out how to appropriately tax copyrights. Photographers for instance sometimes rely on copyright protection to generate revenue off their work, but since an individual photo realistically generates a fraction of their necessary income they would be paying through the nose in taxes. Whereas a huge company like UMG or Sony could easily afford the taxes on their entire vast catalog if they paid the same rate as say a photographer. The trick is finding a way to do this that leverages huge companies to drop some of their less profitable copyrights without killing the livelihood of individual creators.
  • It does... (Score:3, Informative)

    by drakyri (727902) on Tuesday February 26, 2008 @09:41PM (#22567470)
    There are maintenance fees. From http://www.uspto.gov/web/offices/pac/doc/general/mainten.htm [uspto.gov] :

    "All utility patents which issue from applications filed on and after December 12, 1980 are subject to the payment of maintenance fees which must be paid to maintain the patent in force. These fees are due at 3 ½, 7 ½ and 11 ½ years from the date the patent is granted and can be paid without a surcharge during the "window-period" which is the six month period preceding each due date, e.g., 3 years to 3 years and six months. (See fee schedule for a list of maintenance fees.)

    Failure to pay the current maintenance fee on time may result in expiration of the patent. A 6-month grace period is provided when the maintenance fee may be paid with a surcharge. The grace period is the 6-month period immediately following the due date. The Patent and Trademark Office does not mail notices to patent owners that maintenance fees are due. If, however, the maintenance fee is not paid on time, efforts are made to remind the responsible party that the maintenance fee may be paid during the grace period with a surcharge."
  • Patents have a "tax" (Score:5, Informative)

    by Janthkin (32289) on Tuesday February 26, 2008 @09:41PM (#22567472)
    There are fees associated with maintaining patents (due at 3.5, 7.5, and 11.5 years), and failure to pay them on schedule results in cancellation of the patent.
  • by fictionpuss (1136565) * on Tuesday February 26, 2008 @09:41PM (#22567476)

    if all copyrights were taxed at a fixed (but significant) amount per year to maintain the copyright (all registered through the copyright office and searchable), there would be a significant carrying cost and most of the copyrighted material would revert to "public domain" and become available to "promote the progress of science and useful arts."
    Think GPL - turning copyright into the tool of the people - we can do better than carrying costs, and in fact they would only be an unneccessary hinderance.

    For example, the kid who wrote Chocolate Rain [youtube.com] has a potential revenue stream from the YouTube advert. You can bet he wouldn't have guessed that he would get almost 15 million views - so he would automatically have ceeded his potential copyright into the public domain. Someone else who saw the potential could have stepped in, linked it to all the right sites, and took all the advertising revenue for themselves.

    This is an issue which will resolve itself just as soon as the internet becomes the main (legitimate) medium for entertainment distribution. At this point all the money currently spent on old media advertising follows the shows to YouTube or whereever they are being distributed. This creates, in effect, a democratic marketplace which rewards creativity; which will allow viral video authors to generate a revenue stream and (if they wish) go mainstream. Well, that's the dream [livejournal.com], anyway.. and at that point all the big copyright trolls can go fuck themselves as their precious content they horde will have become almost worthless.

    • by cpt kangarooski (3773) on Tuesday February 26, 2008 @10:29PM (#22567994) Homepage
      Well, it's not quite what I would suggest, but it's far from a terrible idea; in fact it is similar to how we used to do things only a few decades ago.

      We should have a system of copyright where an author only gets a copyright if he publishes his work, registers for a copyright, deposits a copy of the work, and pays a token fee. And where the copyright only lasts for a few years before the author must renew the copyright (if eligible, depending on the kind of work and the number of times it's been renewed already).

      We know that this would work well, since it's more or less what US copyright law did up until 1978. We know that the goal of copyright is to serve the public interest by encouraging authors to create works they otherwise would not have created, but having those works minimally protected and in the public domain as rapidly as possible. This serves this goal well, since probably only authors who were encouraged by the availability of copyright would bother to undertake even the very simple steps to procure one. Further, if an author was encouraged by a shorter duration than the maximum allowed, he would likely fail to renew (as usually happened historically), getting that work in the public domain much sooner than if we foolishly gave him as long a term as we could without any involvement on the author's part. It gets copies preserved in the Library of Congress, which can help to ensure the survival of the work over time (especially once it enters the public domain). And requiring him to identify the work claimed, and himself, and his contact information, aids in the public knowing what is and isn't protected (like the title system for land), who to talk to about it, and where he can be reached if you need to license it, etc.

      Sure, some amateur authors would create works without regard for a copyright, and the works might turn out to have been valuable, but so what? The system isn't meant to help them at all costs, it is meant to encourage them to create what they would not have created sans copyright. Your Chocolate Rain kid probably wouldn't qualify. That's good, really. Why should the public pay for the cow if the milk is free? Copyright isn't meant to help authors, or be fair to them; it's meant to be totally one-sided in favor of the public, but sometimes the thing that is most in the long-term public interest isn't what is in the short-term public interest.

      (Plus of course, only an author can claim a copyright on his works initially; it's not as though anyone could take a public domain work away from its author, who could also try to exploit it for money; it's just that the author cannot exclusively exploit it)
  • by umStefa (583709) on Tuesday February 26, 2008 @09:47PM (#22567570) Homepage
    The whole problem with requiring an annual fee to maintain your copyright is that the little guy would get screwed. Many artists spend their whole life creating and virtually starving to death (because sales require promotion and promotion costs money), only to become successful at the end and their early work thereby becomes profitable. They could not afford to maintain their copyrights if fees where involved and then Mickey and friends could step in a utilize their work for nothing.

    A better solution would be to only charge a copyright fee on copyrights held by corporations (i.e. created under a work for hire license or purchased from the artist). When the artist who created the work still holds the copyright (and has no contractual obligations to a company on the use of that work) the current system works fairly decently. Since a company's main priority is its bottom line, unprofitable works would be released into the public domain sooner, but the little guy would still be able to benefit from his / her individual work.
    • by cpt kangarooski (3773) on Tuesday February 26, 2008 @10:45PM (#22568156) Homepage
      First, this is not true. Most artists never become successful at all. Further, when a work does turn out to have copyright-related economic value, it is almost invariably 'front-loaded.' That is, you can exploit the work for the most money immediately upon publication in some medium, with the value steadily and rapidly decreasing thereafter. E.g. a movie sells the most tickets on opening weekend, and fewer every week after until finally it is so unprofitable that it leaves the theaters. When it comes out on video, it sells the most copies the first week, and again, fewer every week after that. The time horizon is usually measured in months per medium of publication. A movie might have a month, a book might have as long as a year. A newspaper, only a few hours (people don't often buy morning editions at night on the same day, much less later on), certain kinds of textbooks, perhaps several years. Creating a work that has lasting economic value is about as rare as winning the lottery. It is just stupid to design our policies around that sort of thing, it's so rare.

      Second, why should we care about the little guy -- or any author, of whatever size -- at all? Copyright is meant to serve the public interest, period. This means encouraging authors to create works the otherwise wouldn't've created, and getting those works into the public domain as soon as possible (with as little protection as possible prior to that). So long as the author creates works, it is utterly immaterial whether or not he makes money at it. Nor is it a bad thing for a work to enter the public domain and for other authors, regardless of whether they're big or small, to make some use of it. All that matters is getting the most number of works created for the least amount of cost in the form of copyright protection granted (i.e. what copyrights are granted initially, how broad the grants are, and how long the grants last). Entertaining silly, romantic notions of authors is what has gotten us into the mess we now find ourselves in. We need to stop with that crap. Copyright is utilitarian; whatever copyright system best serves the public, that's what we need, without one iota of concern for authors, save for how their condition might affect the public good that is our real sole issue. The most works for the least copyright 'buck.' It's as simple as that.
  • Maintenance fee (Score:5, Interesting)

    by david_thornley (598059) on Tuesday February 26, 2008 @09:52PM (#22567616)

    Patents have a maintenance fee. Why not copyrights?

    Why not charge a maintenance fee for copyrights every ten years? That way, most stuff will go into the public domain ten years after publication. It won't bother most people, because most people's copyrighted stuff isn't valuable the next day, let alone ten years later, and if it is they can always extend it.

    The hard part would be figuring out what to charge for copyrights of commercial material, like proprietary software, books, music, and the like. I'm sure people can figure out something halfway reasonable, likely on the low side.

    • by Dunbal (464142)
      No, increase the maintenance fee geometrically every year, and let the author decide at what point it's no longer worth keeping the monopoly. Problem solved.
  • interesting... (Score:4, Insightful)

    by j0nb0y (107699) <jonboy300@yahooCOUGAR.com minus cat> on Tuesday February 26, 2008 @09:58PM (#22567690) Homepage
    The idea of property tax is that the owners of property owe something back to society. The idea goes back to feudalism when the land owners were feudal lords. Instead of(or in addition to) taxes, feudal lords could be called on to send knights into battle as a condition of their land ownership. If they couldn't fulfill the duty, the land would be taken away and given to someone who could...

    The same idea could be applied to intellectual property. The owners of intellectual property should be required to give something back to society. As some other posters have pointed out, the problem becomes valuing the property. The easiest way to value intellectual property is by how much income it brings in to the owner.

    By that measure, intellectual property is already taxed. The tax is simply paid through the corporate or individual income tax.
    • Re:interesting... (Score:5, Insightful)

      by debest (471937) on Tuesday February 26, 2008 @10:38PM (#22568106)

      The same idea could be applied to intellectual property. The owners of intellectual property should be required to give something back to society.

      You're right, they should. It should be in the form of copyright that actually expires! That way, they give back the creative work to the public domain, as was intended by copyright law in the first place.

      This isn't complicated, people. Trying to accommodate those who would forever lock up all popular culture since the 1930's is to be part of the problem, not the solution!
  • by jmv (93421) on Tuesday February 26, 2008 @10:13PM (#22567816) Homepage
    A scheme like that would be terrible for open-source. So you write your program and GPL it, don't pay the property tax. Someone takes it and modifies it, does pay the property tax. Now they've turned your GPL software into proprietary software.
  • by mosb1000 (710161) <mosb1000@mac.com> on Tuesday February 26, 2008 @10:27PM (#22567972)
    Property tax is evil, and it should not be legal. The whole point of property is that once you have something, it's yours and no one can take it from you. With property tax, it's like you don't really own your property, and you are just renting it from the government. Once you stop paying, they come and take it away from you.

    Moreover, if you are going to ask where is the tax on IP, why don't you ask where the tax is on everyday objects around your house. Where is the property tax on industrial equipment, where is the property tax on you bank account, your stock investments, the money other people owe you, labor contracts? All these things are forms of property that are used to generate revenue but are not taxed under property tax.

    The government should not be able to place an arbitrary value and tax rate on any property. I should have the right to be secure in my possessions. If I don't have that right, I don't have any property at all.
    • Re: (Score:3, Insightful)

      by evanbd (210358)
      That's OK, IP is Imaginary Property anyway... the rules *should* be different, regardless of what certain people busy calling infringement theft would like us to believe.
    • two things (Score:3, Insightful)

      1. you need a full spectrum of taxes. say you didn't have a sales tax. some people would generate all of their income and sales, and owe nothing. they freeload. or say there is no property taxes. some would simply acquire land and owe no taxes. its unfair to some guy who doesn't own land. it is in fact a nice way to start a landed gentry and a population of serfs. yeah, that's progress

      2. land property is an abstract concept. money in fact is an abstract concept. land property, or money, has no meaning excep
  • by PMuse (320639) on Tuesday February 26, 2008 @10:45PM (#22568162)
    What a great idea! We could have a schedule of taxes or fees due every few years [uspto.gov] to maintain IP or it would become dedicated to the public. We do that with patents.

    Or, if that's too complicated, we could just ask copyright holders to identify which copyrights they care about and submit a simple application to maintain them [wikipedia.org] or let them flow into the public domain. We did that for nearly two centuries until 1976.

    It's just amazing how little we demand that the holders of incredibly valuable copyrights do to obtain those rights and to keep them.
  • 'If Intellectual Property is actually property, why isn't it covered by a property tax?'

    I'm going to ignore patent here. Intellectual property is not all of one kind. I mean here mostly copyright and maybe also trademark, since these are about creativity, not discovery. But the issues are so different that raising them together is confusing.

    My first thoughts on this matter went to the nature of real property that allows us to tax it. We don't tax the ownership of a refrigerator. Why should they be different. I have to assume it's that no one is busy making more of it, and so the mere holding of it is a tax on others, who might like to use it. In that sense, if real estate tax can be justified (and I might later argue that it cannot), then the justification is that you're taking up a critical resource from the get go.

    In fact, though, copyright is not of that kind. If Gone With The Wind or Cinderella were not created by their respective authors, then those works are just simply not there at all. (You can make whatever claims about a million monkeys you want, but we're not taking more monkeys, we're slaughtering them, and I don't think they'll have the time.) New works of original authorship don't take up space. They are made out of nowhere and every new such work potentially enriches us. So taxing them would be like taxing someone for making new land. If someone could do that (on demand, I mean, not the way we're doing it in the artic with all that melting), I would think twice about taxing it. The making of new land seems a useful skill in a world that is ever more crowded.

    While copyrights on newly authored works don't hurt anyone, there is ultimately a cost to the world of allowing one person to continue to hold copyright ownership beyond a reasonable limit, since at some point the world needs to build on what others do.

    But the notion that someone should have to pay from the first day of creation for the right to have created that work is the most horrible and regressive tax I could imagine. It would create a ticking clock that would limit the bargaining power of new authors in dealing with publishers, who could afford to outlast the author and just publish the work when it fell into the public domain for non-payment. It would favor the big guy over the little guy. None of that is good.

    The middle ground that I might consider would be a tax on long-term extension of copyright. Right now, we continue to extend the copyright term in order to accomplish that. But perhaps a middle ground that says that if Disney wants to extend its rights on a certain work, then it should have to pay heavily for that beyond the reasonable duration of 50 or so years that all authors might reasonably claim to allow them to pursue the use of their works within their own lifetime.

    I might even make the claim that real property could use the same protection. If I work my lifetime to buy a property and then at the end of my lifetime lose my job and can't pay the taxes to sustain my ownership, why should I end up with an untaxed refrigerator which I can keep because it's my property, but not a house I can keep? Where is the incentive to work for something that can be taxed away as soon as you own it? I can totally understand a tax on the estate, since my heirs didn't earn the money, and a reasonable argument might be made that they should make their own fortunes. Passing along money to help a young person get started in life, an impoverished person break even in life, or an aging person retire comfortably is one thing, but ensuring that a dynastic fortune consolidates the power for one's progeny is another.

    In a sense, the continued use by Disney of intellectual property is the same kind of moral issue. The Disney of today is enriched, perhaps unfairly, by the work of prior generations. Taxing that seems reasonable in a way that is different than taxing you or me fo

  • by istartedi (132515) on Wednesday February 27, 2008 @03:17AM (#22570302) Journal

    If the red stapler is property, where is the property tax? For that matter, why don't we all subject ourselves to a quarterly inventory of all our posessions, fill out form J-stroke-zed 45, and send it to the ministry of information?

    Will those attempting to fight the injustices associated with the current IP laws please focus on the unjust aspects of them, not all IP laws. Also, please not cause an even worse problem? pretty please? Pretty, pretty, please? Thanks.

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