California Lawmaker Wants To Change Law To Tax iTunes; Pretending Infinite Goods Are Tangible

from the reality-is-meaningless-if-it-gets-in-the-way-of-tax-revenue dept

Slashdot points us to the news that a Los Angeles (surprise, surprise) area politician is pushing to change a California law that requires sales tax on the sale of tangible goods. He wants the law to be adjusted such that digital goods would be considered tangible goods so they can be taxed. Effectively, this is a way of applying a sales tax on iTunes downloads as a way to make up the California budget shortfall. Considering that the entertainment industry has been trying to convince the world that intellectual property is no different than tangible property, it's not surprising that a politician coming from LA would see no problem with pretending infinite goods are tangible goods. However, it seems likely that such a plan would backfire. If anything, it will push more people to look for alternatives (potentially unauthorized) alternatives if California forces an unwanted price increase on iTunes. Also, if the law starts treating digital goods as tangible goods, will that give people other rights -- such as the right to do what they want with the content after purchase? It looks like there's plenty of opposition to this plan, so it probably won't go very far. In the meantime, though, does someone want to explain the difference between tangible goods and infinite goods to Assemblyman Charles Calderon?

Filed Under: california, charles calderon, digital goods, infinite goods, itunes, tangible goods, taxes

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  1. identicon
    Ed, 9 Apr 2008 @ 7:27am

    Re: Infinite Goods/Internet Tax

    Well, I read the articles, and don't see the point. Basically the author says nothing is infinite, because there are other costs. Online Music is not free, because you have to pay for the internet. Well ya. But I pay for that now, whether I use ITunes, or Amazon, or not. So, that part is no cost. Yes, I have to pay for their bandwidth, but only because I have "must" get it from them, to get it legally. If a friend gave me a copy, the only cost to me is my moral belief that I owe the artist something out of respect (and the cost of storage me). The same goes for his arguments on why software is not free. They boil down to:

    Manufacturer Reputation.
    Ease of use.

    None of this has anything to do with the cost of the software itself, but rather, as Mike points out, how you make money with something that costs little or nothing to produce copies of. Lets face it, a copy of MS office, when you eliminate the fancy packaging etc, costs a couple dollars. You pay for the things you get with it, the things mentioned in the referenced articles. But that is what you are paying for, the things that come with the software. The compatibility with others, the reputation, the usability, the support (though not from MS, but friends, and those who write books on it). That is what I paid for, when all is said and done. And yes I paid, perhaps more times than I should have, for my use of the same version of the software, but those are the rules.

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