Why Would A Tax Haven Adopt A Music Tax?

from the ironic,-don't-you-think dept

The latest record label revenue-generation scheme that's come into vogue is the music tax -- charging every ISP subscriber a flat fee that would give them a blanket license to download music from any source, even P2P networks. In theory, it sounds great, but it's a flawed idea for many reasons, not least of which because it necessitates a massive bureaucracy to levy and collect the tax (which the music industry likes to refer to as a "voluntary license"), then determine how to distribute it (or some tiny portion of it) to artists and other relevant parties. So it was a little surprising to see a government official from the Isle of Man voice his backing for such a tax on his island. The announcement was particularly ironic, given that that Isle of Man is a tax haven.

However, it seems that the government official was just offering up suggestions for the music business; Techdirt's own Mike Masnick was in the session at the Midem conference where the comments were made and says they appeared to be meant as suggestions from the official on how to best show off the Isle of Man's broadband infrastructure. Even with that in mind, it's not clear how levying a mandatory tax on every broadband subscriber shows off the network at all, as opposed to the island's tax collection prowess. What's interesting is that even the BPI -- the UK equivalent of the RIAA -- doesn't like the idea, preferring instead to cut deals directly with ISPs, hoping to maximize profits rather than rely on government-established rates. While ISPs selling out their customers to the music industry is pretty deplorable, at least in that scenario, customers have the opportunity to vote with their wallets and go to another provider. But when the government levies a tax on every broadband subscriber, solely to prop up the music industry's ailing business model, that opportunity doesn't exist.
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Filed Under: isle of man, music tax, tax haven


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  1. identicon
    John Doe, 21 Jan 2009 @ 10:57am

    Let me get this straight, this music tax will be levied against every broadband subscriber, even those of us who don't download music? And it gets us off the hook for file sharing since we pay the license (tax)? Well I can guarantee I will pirate every song known to man if I am getting taxed for an activity I don't currently participate in.

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