Music tax

I'm currently very taken by the Music Business Group justifying their call for an iPod tax with the claim that "unquestionably, there is a value produced by the ability to format shift. It is imperative that creators and performers should benefit directly from this value."

Let's just say for the sake of argument that we don't demolish this argument on grounds that - as Shane Richmond points out - it isn't the creators or performers who stand to be enriched by the tax. (We can test this aspect of the claim trivially enough by asking  whether the MBG plans to waive the tax in the case of deceased performers. Anyone care to lay bets?)

Let's instead look at the implication that because value is created by the ability to format shift people should pay for that value. It's fair enough as far as it goes. Format-shifting does create value. I wouldn't buy CDs if I couldn't shift them on to my iPod-type-thingy and my phone.

And, right there, is the rub. The ability to format-shift is already incorporated into the market price of CDs. Remove that feature and the labels will have to drop prices or accept lower sales (and, in practice, more file-sharing as people find substitutes). Charge an additional fee for a feature that, frankly, we've been using for more than a decade and they'll create the same effect. Hence this fatuous demand for an iPod tax. Oh dear.

Comments

[Rick]

I would be interested to know whether there is any precedent for the government introducing a specific tax which is then passed directly to a specific interested party.

After all, it isn't a cornflake tax that subsidises maize farmers in the mid-west, nor does petrol tax go to Shell or airport tax into the pockets of BAA.

If not, I can't see the Music Business Group's suggestion getting very far.

Traditionally, self-serving subsidies only survive because a very small group is being subsidised by a very large group, and the large group isn't aware of the cost. But if they charge a specific tax on a specific product, it's going to be very obvious and unpopular, and unlikely to surive long.

[Seamus McCauley]

Rick -

TV license fee / BBC?

[Michael]

well this may very well be the downfall of the record industry, but they have to do something. Here's the overview, you take 60 Million computer users and take 100 Bucks a month that's 7.2 billion dollars in revenue, and the 10.00 tax on internet service, would all work, downloading music movies games and software would the be legal.