The Stupidity Of 'You Must Be A Criminal' Copyright Taxes: The SD Card Edition

from the math-and-moore's-law dept

For years, we've discussed the various attempts up in Canada for the CPCC -- the Canadian Private Copying Collective -- to put its "you must be a criminal" tax on the iPod and on your ISP. Both efforts have failed, and now it appears they're just trying totally random stuff just for the hell of it. Howard Knopf explains that the CPCC's latest proposal includes a tax on memory cards:
50¢ for each electronic memory card with 1 gigabyte of memory or less, $1.00 for each electronic memory card with more than one gigabyte of memory but less than 8 gigabytes of memory, and $3.00 for each electronic memory card with 8 gigabytes of memory or more.
What does this have to do with music? No one seems to know. The CPCC seems to be arguing that such cards are regularly used for making copies of music, but that's ridiculous. Perhaps some are using memory cards for such things, but it seems unlikely that it's a large percentage of such cards. They're regularly used in digital cameras and phones, but those have little to do with music most of the time.

The rates are also flat out ridiculous. We've already discussed how the levy in Canada represents around 90% of the cost of a CD-R in some cases. While this isn't quite that bad, it's starting out high, and the rates are static so it's only going to get worse. As Michael Geist explains:
The financial impact of the levy would be significant. A 2GB SD card currently sells for about $6.00 and this would add an additional dollar or almost 15% to the cost. Given that the levy would remain static (or even increase) but the costs of SD cards are dropping by roughly 30% annually, the percentage of levy in the overall cost would likely gradually increase over time. Moreover, music plays a small role in the use of memory cards. A recent report indicates that digital cameras are the primary market for SD cards with smartphones the second biggest (and fastest growing) market. Music is a small part of the equation, yet the CPCC is demanding payment for every memory card sold in Canada regardless of its intended or actual use.
Another way to put it in perspective is via Knopf's original post, in which he notes that this is actually the second time the CPCC has tried this, and the last time around they wanted $0.008 per megabyte, and he does the math on that:
On today's typical 16 GB card that sells for about $30 or less, that would be a "tax" of $128 -- or about 400% -- which shows the CPCC's foresight and the application of Moore's Law.
It's really quite astounding how little the legacy recording industry seems to understand technology and the advance of progress at times. A tax like this is massively damaging to their own interests in the long run, but they just don't seem to recognize it. In the meantime, as ridiculous as this is, Knopf notes that it still means there's going to be a lot of wasted money fighting over this:
Unfortunately, the way the Copyright Board works, it seems inevitable that one or more parties are going to have to spend a lot of money to convince the Board not to impose this levy -- or "tax" as most will call it. The CPCC will spend a lot of money -- which it has from undistributed levies -- to line up its usual expensive experts to provide evidence of its entitlement to this "tax". One or more parties will have to provide evidence and experts at great expense to refute this -- even though it seems so obviously wrong. But that's the way the Copyright Board mechanism works in this and other instances where a collective is entitled to file a proposed tariff.
It's really quite stunning the sense of entitlement the industry feels here, that it can simply put a massive tax on a form of memory that is rarely used for music. Though, if it passes, and musicians really want to make some money, they might be better off getting jobs at Best Buy and pushing people to buy SD cards.


Reader Comments (rss)

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    johnjac (profile), May 16th, 2011 @ 8:57am

    Tax Ears

    Let's cut to the chase, and tax ears. 100% of pirated music is listened via ears.

    Human ears, are the obvious place to start, but lets not forget the the horses who have been caught listening to pirate music. http://www.techdirt.com/articles/20090327/1113014276.shtml

     

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      Ed C., May 16th, 2011 @ 10:06am

      Re: Tax Ears

      And what if you don't pay, will they cut them off or just put you in jail? I think, ultimately, they want to just cut off the heads of anyone that doesn't pay their monopoly rents, because once you've heard or seen it, you can't ever really get it back out (believe me I TRIED!). Yep, and they'll say they have the right to do so, to merely claim their stolen property.

       

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        Fushta, May 16th, 2011 @ 11:06am

        Re: Re: Tax Ears

        That totally undermines my tin-foil hat use! Can't really wear a tin-foil hat if I has no head.

         

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          harbingerofdoom (profile), May 16th, 2011 @ 11:33am

          Re: Re: Re: Tax Ears

          better crank up the legal department then. we cant have the legacy tin foil hat market completely decimated by chopping off peoples heads thus eliminating the need for the market to begin with.

           

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      DogBreath, May 16th, 2011 @ 11:43am

      Re: Tax Ears

      Let's cut to the chase, and tax ears. 100% of pirated music is listened via ears.

      One of the final "Analog Holes" to be plugged will be ears, along with eyes, of course.

      Once everyone has their surgically-implanted, government-mandated from birth Cochlear and Retinal CCD Implants , all electronic sound and image translation will be DRM encrypted before being sent to your brain. Without pre-purchasing the proper licensing rights, you won't be even able to hear yourself fart, nor see the expression of disgust on the faces of the persons trapped in the elevator with you.

      Woe to the day when those DRM licensing servers go down, for that day everyone will be deaf and blind, but at least you'll still be able to smell... until the day they take that sense away through electronic means too.

      I bet Disney already has a patent on this type of technology too.

      "When analog is outlawed, only outlaws will have organic eyes and ears."

       

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      Jeff Badger, May 17th, 2011 @ 10:58am

      Re: Tax Ears

      I got a better one. Music is sound. sound is just airwaves, lets tax Air. it is truly the root of all sound and therefore the root of all this evil pirating.

      Or the music companies could start releasing hard wired SD cards with the music on them in full lossless digital format.they could call them MD's.would it not be easy to go buy an album, pull out the Sd card and place it into your smartphone and listen to it right there. or into you car stereo(as most after markets are coming with sd slots now).Theres even a right protect notch to prevent over writing. the price of SD cards now should warrant this type of media change. read times on cards are getting faster than disc spin it is only smart to move media to SD locked cards. "lets watch a movie, how about Avatar in ultra HD? OK!" *James inserts SD card into TV and watches movie, instantly. no extra player. no discs. no load time.

      You know there is no mention of memory sticks.

       

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    Matt (profile), May 16th, 2011 @ 9:54am

    Seems easy enough...

    Introducing the TE card backwards compatible with SD cards, not subject to ridiculous SD card tax.

     

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      crade (profile), May 16th, 2011 @ 9:57am

      Re: Seems easy enough...

      If it's anything like the CDs, all they had to do was put labels on them that said "music CD" and "data CD" and no one had to pay the levy anymore (unless you were dumb enough to buy the one labeled "music CD" of course)

       

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    Chronno S. Trigger (profile), May 16th, 2011 @ 9:56am

    In other news

    Internet traffic has spiked in Canada after the "you must be a criminal" tax on memory cards went into effect. When an anonymous survey was done the most common reason was "If I'm going to be treated like a criminal I may as well have the benefits".

    CPCC is noticeably upset with this response. "The tax was suppose to give us free money, not give them a reason to pirate more. Don't they know they're costing me my six figure bonus." the head of the CPCC said in an interview.

     

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      crade (profile), May 16th, 2011 @ 10:04am

      Re: In other news

      There is actually some truth to this. I have met some people here who "think" (ie: are in willful denial) that because we have this tax it must mean we are actually allowed to copy music we don't own. This is despite it being clearly spelled out that we don't get squat for paying the levy. They may just be looking for any excuse, but it is at least providing a skin deep argument for them to give to those who don't know any better and may just take their word for it.

       

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        Chronno S. Trigger (profile), May 16th, 2011 @ 10:14am

        Re: Re: In other news

        I can't see any possible reason for the CPCC to not realize that this encourages piracy. And since the CPCC are trying to outlaw anything that encourages piracy in any remote way...

         

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        Anonymous a-hole, May 16th, 2011 @ 10:16am

        Re: Re: In other news

        If I get to pay a tax on gasoline, I'd better get some gasoline.
        If I pay a tax to defray the "lost revenue" of music copied onto SD cards, you bet your ass I'll copy music.

         

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          Chronno S. Trigger (profile), May 16th, 2011 @ 10:21am

          Re: Re: Re: In other news

          Isn't is something asininely stupid like defraying the lost revenue of copying already payed for music to another storage medium for personal, legal use?

           

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            crade (profile), May 16th, 2011 @ 10:23am

            Re: Re: Re: Re: In other news

            Yes, officially it is defraying the lost the revenue which everyone in the country has agreed they are not entitled to receive in the first place.

             

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              Chronno S. Trigger (profile), May 16th, 2011 @ 10:29am

              Re: Re: Re: Re: Re: In other news

              Then let's start calling it exactly what it is. It's not the "You must be a criminal tax (since it doesn't cover anything illegal)", it's the "We just want more money (since we don't want to remove the revenue stream of a lawsuit)" tax.

              If that's not encouragement to jump onto a P2P program and start downloading, I don't know what is.

               

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                Marcus Carab (profile), May 16th, 2011 @ 10:39am

                Re: Re: Re: Re: Re: Re: In other news

                Actually, the levee has led to some legal grey areas when it comes to Canadian law. There was even a short period when downloading copyrighted music was explicitly legal so long as it was stored on leveed media. After some more lawsuits that's not the case anymore, but nor is it explicitly illegal - it's still an open question. That's one of the things the proposed copyright bill would address, and now that we have a Conservative majority government it might not be long before that bill becomes law...

                There's a lot of great info here:
                http://en.wikipedia.org/wiki/File_sharing_in_Canada

                 

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                  crade (profile), May 16th, 2011 @ 10:59am

                  Re: Re: Re: Re: Re: Re: Re: In other news

                  It's only a "grey area" because they refuse to press the issue so they can continue to claim our laws aren't strong enough.

                  If you actually read the law about private copying, it's quite clear that all forms of distribution are outlawed. Technically I guess it could be grey whether or not it is only the person doing the sharing who is breaking the law and not the receiver.

                  "[The private copying exemption] does not apply if the act described in that subsection is done for the purpose of doing any of the following [...]
                  (b) distributing, whether or not for the purpose of trade;
                  (c) communicating to the public by telecommunication; or

                  Meh.

                   

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                    Marcus Carab (profile), May 16th, 2011 @ 11:24am

                    Re: Re: Re: Re: Re: Re: Re: Re: In other news

                    Yeah, it's clear that uploading is illegal for sure. But the grey area that exists around downloading is a pretty significant one - I'm not sure how you can "meh" it.

                     

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                      crade (profile), May 16th, 2011 @ 12:21pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re: In other news

                      Well, a few reasons.

                      As the article you provided mentions, the ruling was overturned for the sole purpose of preventing receiving from being legal, which to me makes it pretty clear that it isn't.

                      It's a meh issue because the only reason they haven't resolved this is because they want to make the reforms seem more important than they really are and also because at the article you linked to mentions the police have basically said they have more important things to do with their time anyway, regarless of the technical legality.

                      Also, it takes 2 to tango, and the sources are the real problem anyway.

                       

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              DannyB (profile), May 16th, 2011 @ 10:35am

              Re: Re: Re: Re: Re: In other news

              But I am already legally entitled to copy my purchased (eg licensed) mp3 file to my SD card so I can listen to it in my phone. The license agreement says so.

              That does not represent a loss of revenue. It is not theft. It is not piracy.

              So why are you taxing my SD card again? Or my blank CD for that matter?

               

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          kyle clements (profile), May 16th, 2011 @ 11:47am

          Re: Re: Re: In other news

          How about a speeding tax on gasoline. I mean...they know that everyone speeds, which is illegal, and they aren't catching everyone, so rather than needing to witness the crime itself, handing out a ticket, potentially taking it to trial the charges are disputed it, etc..... Lets just add a $0.10/ Litre speeding tax to gasoline!

          When people know that they are pre-paying a speed tax on every drop of gas they buy, that will surely keep them driving at reasonable speeds, right?

           

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        btr1701 (profile), May 16th, 2011 @ 7:28pm

        Re: Re: In other news

        > I have met some people here who "think" (ie: are in willful denial)
        > that because we have this tax it must mean we are actually allowed
        > to copy music we don't own.

        I can't imagine why Canadians *wouldn't* think that. What's the tax for, after all? It's supposedly to reimburse the industry due to lost sales from people using the media that's taxed. If that's the case, then why wouldn't the people who pay the tax be justified in copying the music?

        Otherwise, it essentially *is* just free money that a bunch of corporations got just because they asked for it.

         

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          dcee (profile), May 31st, 2011 @ 8:53am

          Re: Re: Re: In other news

          Honestly, that's what I thought for a while... and I'm not dumb... I mean, we heard about a "mp3 tax", a "copy tax", so what, it means it's legal!

          I guess it's a bit like taxing illegal drugs...

           

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    rubberpants, May 16th, 2011 @ 10:04am

    Apparently, if the cash from government-granted monopoly rents isn't coming in as expected, new government-granted monopoly rents must be created elsewhere to make up the difference.

     

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    Colin, May 16th, 2011 @ 10:04am

    There wouldn't be any music pirating if record labels didn't release music, so shouldn't we just tax the hell out of the labels?

     

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    Hulser (profile), May 16th, 2011 @ 10:20am

    Canadian Private Copying Collective?

    If I had to guess the purpose of the Canadian Private Copying Collective, just based on the name, I would think it was for people who got together in private groups to trade copies of pirated movies and songs.

     

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    Spaceboy (profile), May 16th, 2011 @ 10:21am

    What I want to know is why the other digital media format people aren't jumping on this bandwagon.

    By their logic there should be a tax for everything -

    Stealing Movies Tax
    Stealing Games Tax
    Stealing News Tax
    Stealing eBook Tax
    Stealing AudioBook Tax
    Stealing TV Show Tax
    Stealing Pictures Tax

    How is it possible that politicians approve this kind of crap?

     

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      crade (profile), May 16th, 2011 @ 10:26am

      Re:

      The politicians are between a rock and a hard place. They have pressure from the electorate to act democratically and pressure from the U.S. to act like dictators. I think they end up with the dumbest laws ever by trying to compromise.

       

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      DannyB (profile), May 16th, 2011 @ 10:26am

      Take it further

      There should also be taxes on non-digital goods.

      Stealing Laptops Tax
      Stealing Mobile Phones Tax
      Stealing Cars Tax


      Since the tax revenus on the stolen digital goods doesn't end up in the hands of the victims (eg, artists), neither should the tax revenue for stolen physical goods.

      Instead the tax revenue can go into continuing education campaigns to teach people that it's bad to steal Laptops, Mobile Phones and Cars. (But it's not bad to steal jewelry since there is not yet a tax levy on stealing jewelry.)

       

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      ChurchHatesTucker (profile), May 16th, 2011 @ 10:27am

      Re:

      Can we get a Stealing Money Tax?

      I'd say $1.20 on each $1 sounds fair (I'll need the 20¢ for my overhead expenses.)

       

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    DannyB (profile), May 16th, 2011 @ 10:22am

    Bu, bu, but . . .

    . . . think of the poor record company executives,

    er, um, I meant to say:

    think of the poor artists!

    This levy is going to pay the artists right? The RIAA and its members are all about protecting the artists aren't they?

     

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      Rikuo (profile), May 16th, 2011 @ 10:48am

      Re: Bu, bu, but . . .

      Nope! Have you recently heard that Limewire agreed to pay the RIAA 105 million dollars? And guess what the 'AA said in response? It's going to spend that pile of cash on more anti-piracy campaigns! Not a single cent is going to the artists the 'AA sued Limewire for...wait isn't that illegal? It's like an ambulance chaser suing the driver in court and pocketing all the money (instead of giving out a small fraction so s/he can claim their client 'won' damages)

       

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      Gracey (profile), May 16th, 2011 @ 1:07pm

      Re: Bu, bu, but . . .

      Likely not. As a photographer, I spend a fair bit in both SD and CF cards over the course of a year. It's hard enough to make a living today in this field...and I so just needed to add yet another tax onto my overtaxed life.

      I seriously doubt they'll put any of that money into any of my pockets.

       

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    Canucklehead, May 16th, 2011 @ 10:24am

    We need a tax on cash...

    Since cash is the preferred method of payment for underworld transactions such as drugs, hookers, and undeclared cash labor; a new tax must be imposed on the withdrawal of cash from every persons bank account.

    Since honest people pay for everything electronically or with checks; everyone else must be doing secretive things with their cash. We must stop these underworld cash activities at any cost. Anyone who complains must have something to hide.

    Therefore, small bills should get a small tax, and bigger bills should get a bigger tax. 1% of tax proceeds to be shared with honest people, prorated on their level of honesty.

    The other 99% will be rolled forward into ongoing education, lobbying, legal fees and other professional costs of this important new tax.

     

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      DannyB (profile), May 16th, 2011 @ 10:32am

      Re: We need a tax on cash...

      There are people who would just love a completely cashless society.

      The IRS for example. All income could be properly taxed.

      The police for example. All transactions would be recorded and subject to scrutiny. (Just how did you get that house and swimming pool again?)

      OTOH, it would be one of the most powerful means of repressive control ever imagined.

       

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        anymouse (profile), May 16th, 2011 @ 4:51pm

        Re: Re: We need a tax on cash...

        You know who DOESN'T want a cashless society....

        Politicians.....

        Imagine the difficulty hiding the bribes...er special interest funding in a cashless society...

        Sure most of it is 'imaginary' incentives and not direct cash payments, but there is enough cash going thru political lobbying channels to fund a couple third world countries for the next decade. And I'm not making these things up, I'm sure I saw a study from the BSA (BullShitAcademy of Statical review) that supports these statements.

        /sarcasm

         

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      Any Mouse (profile), May 16th, 2011 @ 2:00pm

      Re: We need a tax on cash...

      I know there was a story going around about removing the income tax and just taxing all your monetary transactions. Making a deposit? Taxed. Making a withdrawal? Taxed. Paying your taxes? Taxed.

       

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    OC, May 16th, 2011 @ 10:34am

    Don't you know... a recent report states that approximately 80-120% of all mp3 files produced yeach year are being photographed by digitial cameras and passed around in underground cultures on SD cards. Clearly something needs to be done.

     

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    Rikuo (profile), May 16th, 2011 @ 10:51am

    Can someone familiar with Canadian law tell me how this is constitutional (dunno if Canada has a constitution but you know what I mean). The tax explicitly says you have to pay for a crime you might commit, not that you have committed one.

     

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      Anonymous Coward, May 16th, 2011 @ 11:04am

      Re:

      Under Canadian constitutional law, the Federal Government has the right to tax anything they wish. It's not actually a "crime" tax, simply a tax which uses crime as the justification.

      (Naturally, the reason why taxes aren't thrown around willy-nilly is because taxation is one of the few things that can lose you elections)

       

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    Anonymous Coward, May 16th, 2011 @ 10:57am

    what we need is an arsehole tax to charge these morons with.

     

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    Bengie, May 16th, 2011 @ 11:17am

    Just make it an income tax

    I say just let the media have an income tax...

    Actually, I say lets freeze their bank accounts and kick them out of the country. Ship them off to Africa. Then, we take their frozen bank accounts and use that money to ship some poor Africans over here.

    It's win-win. We help some people while taking out the trash.

     

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    ltlw0lf (profile), May 16th, 2011 @ 11:17am

    Bands Sell Music on USB Sticks

    I've been to several concerts recently where the band offered for sale (for 20-25 USD) USB tokens with the recording of the output of their soundboard during the concert. Usually it is bands that practice CwF+RtB, but I've seen more mainstream bands doing it now too. One concert I went to, everyone who entered the building on a paid ticket received a ticket to pick up a USB token, for free, at the end of the concert (ticket price to get in was about $35, so not sure how they made a profit (though I suspect they shared profit in beer sales.

    So, not only is this hurting the consumer...it is hurting the very industry they say they are protecting.

     

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    Simon, May 16th, 2011 @ 11:20am

    Really? REALLY?!!

    "The CPCC believes that the evidence now
    shows that electronic memory cards are ordinarily used by Canadians to copy music. Consequently,
    the CPCC has requested that a levy be applied to these cards."

    http://cpcc.ca/english/pdf/CPCC_2012-2013_Tariff_Press_Release_May_16_2011_FINAL.pdf

    W hat utter bullshit.

     

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    techturf (profile), May 16th, 2011 @ 11:28am

    Any court cases on this yet?

    Have there been any cases where someone tagged for downloading music has argued that he had an implicit license to do so since he had bought some blank CDs?

     

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    charliebrown (profile), May 16th, 2011 @ 11:41am

    Let's follow their logic for a moment:
    Blank cassettes - Record music to them - tax
    Blank CD's - Record music to them - tax
    Blank SD cards - Record music to them - tax

    Therefore:
    Blank hard disk drive - Record music to it - tax
    Roll of foil - Record music to it - tax
    Candle wax - Record music to it - tax
    Blank paper - Write/print music on it - tax

     

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    John Doe, May 16th, 2011 @ 1:27pm

    I wish the US would do that...

    The way I see if, the fee give me a license to fill the card with movies, music, books and all things digital. So for $3, I could have 8GB or more of media. That is a good deal when 1 song can cost $1 or more.

    BTW, I don't pirate today, but I have stated here before, if I get charged any kind of tax/license fee like this on media or broadband connections, I will start pirating like the world has never seen before.

     

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    Jason (profile), May 16th, 2011 @ 1:58pm

    Clarification

    Just a point of clarification - recordable and rewritable CDs in Canada are still subject to this levy. There is no "Data" vs. "Audio" CD difference that was suggested above.

    The law that created the CPCC says that the levy shall apply to all "media" that are "normally" used for the purposes of recording audio.

    "Normally" in this context does not mean "typically" or "usually", just that the use would be considered "normal". This is why DVDs aren't subject to this levy - although they could record audio just as easily, this isn't a "normal" use. There aren't many audio-only DVD devices on the market.

    Under this rule, media cards and hard drives would absolutely qualify for the levy, and almost did. It took a court ruling to determine that these were in fact "devices", not "media", and therefore didn't qualify for the levy.

    Finally, why only audio? Why not video? Because the entire idea was dreamed up by executives and parliamentarians who wanted to compensate the music labels for all those mix tapes and home-burned CDs. Napster wouldn't hit it big for another 4 or 5 years.

     

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    identicon
    JustSomeGuy, May 16th, 2011 @ 6:37pm

    Half in jest: I actually think this should go ahead, but with one proviso.

    Since I'm paying money to be a "criminal", that should actually give me the right to *be* a criminal.

    In other words, paying that $1 levy on an SD card should give me the right, free from all legal ramifications, of copying as much music as I like.

    I'd gladly pay a buck for that :-)

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    David, May 17th, 2011 @ 12:41pm

    Hungarian storage

    Seems in Hungary, their RIAA equivalent pushed for a huge tax on EVERY form of storage medium - hard drives, sticks, memory cards, you name it, pushing the prices up by a whopping 34%!

     

    reply to this | link to this | view in chronology ]


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