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Open Source R&D Tax Credit? 196

Dan writes "The Center for American Progress is proposing an R&D tax credit for open source development." From the article: "Subsidizing open source software development can also be justified on grounds of economic efficiency. Open source software development enhances the ability of other developers to create new products. It also enhances the development and dissemination of knowledge and ideas more broadly. Since the benefits to the broader software development community and the economy as a whole go well beyond the users of an individual software product, a policy that subsidizes open source development would increase economic efficiency."
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Open Source R&D Tax Credit?

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  • Donations (Score:1, Interesting)

    by Anonymous Coward on Monday March 20, 2006 @06:22PM (#14960399)
    I don't know much about corporate tax law, but this is something I keep wondering about: Let's say you develop an open source application. Now let's say you donate the copyright to the FSF under the condition it be GPLed. That code is still of at least some worth to you, because you have GPL rights to it. But, legally you have just donated the code, a thing of worth, to the FSF, a nonprofit organization. Does this count as a deductable charitable donation?
  • by HippieJoe ( 632993 ) on Monday March 20, 2006 @06:46PM (#14960562)
    Why wait for a proposal to pass when you can get HUGE tax credits for writing closed source software NOW? For example, Ohio gave a closed source company $82,386 to keep it's 11 employees in the state! (http://www.odod.state.oh.us/newsroom/releases/135 7.asp [state.oh.us] Third example, tax break + grants) Thats $7489 per employee now, not in some proposed future.

  • No thanks! (Score:3, Interesting)

    by Zarxrax ( 652423 ) on Monday March 20, 2006 @07:27PM (#14960816)
    Instead of supporting the further degeneration of a broken tax system, how about supporting a better one altogether? http://fairtax.org/ [fairtax.org] http://fairtaxgroups.com/ [fairtaxgroups.com]
  • Horrible Idea (Score:2, Interesting)

    by Anonymous Coward on Monday March 20, 2006 @07:39PM (#14960881)
    How about letting market forces (you know, that little supply and demand thing) determine how/when/why a product is adopted instead of using community resources to pad it? Successful OpenSource projects are successful because they are forced to COMPETE, often much harder than their proprietary counterparts. Weighing the game in favor of OS does as much damage as IP does for proprietary software.

    Furthermore, just because software is OS doesn't mean it's good. Why give tax credits to those who don't deserve them? Better instead to force them to compete by being good, and, therefore, deserving of profit.
  • by iamacat ( 583406 ) on Monday March 20, 2006 @08:23PM (#14961071)
    If I already paid for programmer's time with my taxes, I should be able to use the source in any way I want - without giving away my own work, acceditation or any other trouble whatsoever. By the way, the same goes for patents received by university stuff/students, software written for a government contract etc.

    If you want to impose GPL on me, do it on your own time/dime.
  • by Ogemaniac ( 841129 ) on Monday March 20, 2006 @08:44PM (#14961156)
    because no one ever earns the money in the first place. That is the tragedy of the dead weight loss, where a win-win exchange is averted because the government tries to take a bigger cut than the net gain between the two traders.
  • by Eli Gottlieb ( 917758 ) <eligottlieb@noSpAm.gmail.com> on Monday March 20, 2006 @10:43PM (#14961621) Homepage Journal
    This tax-credit doesn't go far enough.

    We already let people deduct charitable donations from their taxable income, why not charitable labor hours? Open-source is but one form of volunteer work, the others should get credit. People's labor is worth something, especially for a worthy cause.
  • by AHumbleOpinion ( 546848 ) on Monday March 20, 2006 @11:45PM (#14961813) Homepage
    But, legally you have just donated the code, a thing of worth, to the FSF, a nonprofit organization.

    Not necessarily, accounting is strange. If you do R&D and develop something patentable you can not list that patent as an asset that has value. However if you buy a patent then you can list that patent as an asset that has value. The rational is that in the former case the developer can just make up a number and say that is the value of the patent, however in the later case we have a historical market transaction that defined the cost of the patent. "Historical Cost" is something very important to an accountant, and your donation doesn't have one, your R&D expense doesn't count, R&D is merely considered a current expense.
  • Comment removed (Score:3, Interesting)

    by account_deleted ( 4530225 ) on Tuesday March 21, 2006 @12:16AM (#14961917)
    Comment removed based on user account deletion
  • Re:Pot, meet kettle. (Score:2, Interesting)

    by cduffy ( 652 ) <charles+slashdot@dyfis.net> on Tuesday March 21, 2006 @06:29AM (#14962752)
    Just an initial word: You make good points.

    The primary effect that is relevant here is that, as a retiree, you will consume scarce resources without being productive, and the more money you saved during your working years, the more scarce resources you will consume for your leisure activities.

    Granted, folks who are no longer working in retirement consume scarce resources even when living off personal savings. However, I submit that the positive economic impact of the effort such people put into the system to accrue such resources as to be able to enjoy a reasonable standard of living in retirement outweighs the later drag. Economics is, after all, not a zero-sum game.

    Admittedly, this is an unsupported assertion. Admittedly, some study is needed to determine the truth of the matter. Admittedly, similar reasoning has been used to justify less paletable conclusions (ie. the retroactive effects of the DMCA), and analysis is thus valuable in such cases.

    I fully support privacy and a firmly limited government. That is precisely why I think a good national ID card system is needed: it improves privacy and lets us limit what government can do with our data. Contrast that with the current system, with its patchwork of regulations and insecure identifiers and tokens.

    I don't see centralization as being an improvement on the patchwork. Yes, it allows for more effective regulation and limitation should such be implemented -- but it also allows more room for abuse, and it's been recently demonstrated that a substantial subset of the American populace is willing to give up privacy rights and permit more expansive government powers in return for percieved security.

    Your single minded approach amounts to little more than "social Darwinism", and it was popular in the early 20th century, along with lots of other ineffective and amoral political theories.

    Whether something is moral or otherwise obviously depends on the perspective of the viewer -- members of the religious right have one perspective; you have another; and I have yet another. Raw assertions regarding moral principals aren't necessarily useful in a discussion along these lines, simply because in many cases they can't be effectively or objectively argued to an individual working from different base principals. Practicality, on the other hand -- that's a different and more reasonable approach, and I'll admit that some of the policies I argue for are not in practice implementable within the US as it stands.
  • Re:Pot, meet kettle. (Score:3, Interesting)

    by penguin-collective ( 932038 ) on Tuesday March 21, 2006 @07:40AM (#14962937)
    Just an initial word: You make good points.

    Thanks. You do, too.

    However, I submit that the positive economic impact of the effort such people put into the system to accrue such resources as to be able to enjoy a reasonable standard of living in retirement outweighs the later drag.

    Sure, that's the way the system ought to be working. But we're soncerned with a more subtle question, namely whether the particular handling of the $10k of social security tax is overall beneficial. That is, does giving everybody the extra $10k of social security tax for private investment in retirement funds encourage enough extra productivity in order to make up for the costs arising from millions of people who weren't smart enough to make proper private investments?

    I don't see centralization as being an improvement on the patchwork.

    I don't see why a national ID system needs to result in centralization. In fact, quite to the contrary, a good national ID system could be used to enforce de-centralization, for example through the use of smartcards.

    I'm sure there are many designs for national ID systems to which I would object on the same grounds as you, but a properly designed national ID system could greatly enhance both privacy and security compared to the current system.

    Whether something is moral or otherwise obviously depends on the perspective of the viewer

    Well, I think Republicans would have a field day with that statement ("moral relativism" and all that). However, let's assume that it's true; we can then still ask what most people think about an issue. And when it comes to Social Darwinism, this discussion was raging roughly a century ago and people generally found it to be incompatible with their views of just and moral behavior. I don't think that belief has fundamentally changed; when people favor policies that amount to Social Darwinism, it's usually because the policy has been carefully dressed up to hide its consequences.

    Let me put it differently: would you really want to have a 75 year old little old lady starve on the street because she couldn't figure out how to privately invest her retirement funds when she was younger? Or would you want to keep her alive using non-social security funds? Because that's the choice you are faced with when you get rid of social security.

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