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The Almighty Buck

Have You Paid Your Bertelsmann Tax Today? 313

Mwongozi writes "Germany is planning to slap new taxes on computer, telecommunications and Internet products to ensure that authors are properly rewarded for the use of their work, a newspaper said Wednesday. The Berliner Zeitung said proposals had been drafted requiring manufacturers of goods from computers to printers, modems, compact disc "burners" and other devices to pay royalty fees that would then be forwarded to music and film companies." My guess is that Bertelsmann, the world's third largest media company, has a little something to do with this. In the U.S., any devices intended for digital audio are already taxed similarly to the above proposal but general-purpose computing devices are not. (Though the RIAA sought to include them too.) Has anyone considered what an extraordinary situation it is where government tax collectors are collecting taxes which are funneled straight to corporations?
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Have You Paid Your Bertelsmann Tax Today?

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  • Right...

    So, for people in my situation, (doing scientific research) who _need_ CD-R's, we're expected to give most of our grant over to computer games companies?

    For background, I'm working on an electrical ceramic. I generate lots of data, as most of it can only be sensible captured in picture form (1Meg per picture), and processed down later. In two days on the microscope, I managed to fill a blank Zip disk (100 Meg) [0].

    I get two days a week for data collection, so this means that over the past six weeks, I've got 1 CD full of raw data. Were I to continue this work for a full PhD, I make that 24 CD's full. Or 820 pounds (just under 1/3 of the research grant) to him. Because I might be priateing games.

    To him, I say, get a life.

    [0] Ok, particulry productive day, normally it's about 60 Meg.
  • ... when he said Corporatism is Socialism for Corporations.
  • read the definitions

    under

    USCode Title 17 Chapter 10 - digital audio recording devices and media Subchapter A - Defintions (too lazy to learn how to annotate correctly)

    (4)

    (a) A ''digital audio recording medium'' is any material
    object in a form commonly distributed for use by individuals,
    that is primarily marketed or most commonly used by consumers for
    the purpose of making digital audio copied recordings by use of a
    digital audio recording device.
    (b) Such term does not include any material object -
    (i) that embodies a sound recording at the time it is first
    distributed by the importer or manufacturer; or
    (ii) that is primarily marketed and most commonly used by
    consumers either for the purpose of making copies of motion
    pictures or other audiovisual works or for the purpose of
    making copies of nonmusical literary works, including computer
    programs
    or data bases.




    Which is cutting the fine print pretty thin. What makes this curious is that computers are now marketed as home audio devices for "downloading digital music", just watch your nearest Dell commercial. See how easy lobbying is, you only need to change a few words to get what you want.

    --
  • I could live without pop music all together. This whole big Stuper Star music crap can follow Lars to hell for all I care. The airways might then be filled with more interesting programing and my radio would be useful for more than hearing the same old top forty again and again and again. Get the picture? It's a racket.

    In the mean time, I don't feel like paying to support the thing I hate because I might want to make a CD of my grandfather's pictures.

    Despite this, I can also share the indignation of those who are revolted at the prospect of paying for their fair use of the music they bothered to buy. So yes, all around you are a TROLL

  • by Kagato ( 116051 ) on Wednesday September 06, 2000 @07:08AM (#801416)
    You aren't paying anything on CD-R's. You are paying it if you were to buy a Music CD-R. If you go to Best Buy or or Circuit City you'll find they have "Music CD-Rs". These are usually 2-3 times as much as a normal data grade CD-R. They have some pre-pressed data in them that indicated that they are Music CD-Rs. Although your computer CDR burner doesn't care which one you use a stand alone CD-Recorder (such as the ones sold buy Phillips, or Pioneer) will only work with the "Music CDR's".
  • by ewhac ( 5844 ) on Wednesday September 06, 2000 @07:08AM (#801420) Homepage Journal

    A couple of weeks ago, I wrote a bogus news story [best.com] about taxing blank digital media. It was born out of my blinding frustration that, in what should be a conspicuous, informed public debate, all the wrong people are being listened to.

    I had no idea I was predicting the future.

    Schwab

  • No it wouldn't. If I didn't like that a hotel charged me because others had stolen towels in the past, I could choose not to stay in that hotel, or If I felt strongly enough, I could even start my own hotel where people had to bring their own towels. or, I could develop some way to make cheaper towels so it didn't matter. Hopefully you get my point: The consumer has choice, whatever I do or whatever the hotels independently decide to do.

    On the other hand, if a government charges me for copying music etc. that I haven't copied, I can hardly choose another government, can I? and I can't even set up an alternative company who doesn't mind their music being copied because the public would still have to pay the tax on the blank media.

    The point here: This kind of tax reduces choise for the consumer. It leaves little room to manoeuvre for new companies with new ideas. It is an ill-concieved quick fix solution to a more than complicated problem.
  • As all geeks know, positive feedback systems are inherently(sp?) unstable. Increased output pushes up the input, which increases the output until the system overloads.

    The way collected funds are distributed could produce a positive feedback system here could it not? Taxes are collected from all forms of recordable media, but who are they distributed to? If the funds are proportioned according to market share, that means that the largest corps get extra input which will encourage more output which will increase market share....

    How much goes to small bands? Can I strum a guitar, call myself a musician, and then lay claim to my share of the taxes? How do you qualify to be a distributor? If I record my guitar strum, put it on a CDR while releasing it as an MP3, do I then qualify as a distributor with the right to lay claim to my fair share of the bounty?

    If you divide the booty up by market share, would that be a share of units sold or value of units sold? If I gave away crap in a cereal box, does that increase my market share?

    It never ceases to amaze me that legislatures happily pass totally unenforceable laws that create more problems than they solve. Some things just cannot be fixed by edicts from on high.

  • by pschmied ( 5648 ) on Wednesday September 06, 2000 @05:48AM (#801425) Homepage
    and spend less time being seduced by the libertarians.

    Look at the historical precident in this country for laissez-faire capitalism. We gave rise to the Captains of Industry, Aka the "Robber Barons". Do we really want to repeat those dark days when deregulation was big?

    Given a choice between being abused a large, inefficient government that I have the hope of participating in, versus being abused by the efficiency of corporation where votes are bought by dollars, I'll take government any day.

    Deregulating an industry does not limit govt payouts, nor does it reconcile the fact that the average American living at the poverty line pays a higher percentage in taxes than your average corporation (average corporations pay between 2%-6%. How much do you pay?).

    The corporate welfare structure in the United States is primarily the result of a mush-headed reverse-progressive (regressive?) tax scale that favors large corporation over the small businesses that are the real support for communities.


    -Peter

  • I mean, honestly. Knives can be used for crime. So starting tomorrow, all knives sold in Germany must be taxed, and the taxes will go straight to the National Association of Kitchen-Knife Crime Victims. Er, no. Of course the money will go to the National Association of Kitchen-Knife Producers, because they have all the trouble and extra cost with people sueing them and so on. Er.

    Seriously: Europe has embraced Open Source, Germany has dumped Windows 2000 (here [heise.de] and here [heise.de]) in some government departments in favor of Linux & Staroffice (yes, on the Desktop!) and there have already been so many rumours about taxing the Internet, taxing Computers, taxing raw CDR media, and so on.

    NOTHING of this all will happen. That's because all the "big evil players" will and can not agree on one common path. The minute that most ISPs ban Napster, there will be ISPs advertising "No banning" and charging extra, and gaining customers. The minute somebody imposes a tax on CDR media, there will be cheap imports from South India (or wherever) and nobody will buy the taxed versions any more. (Is anyone in Germany actually buying GEMA-approved CD-Audio media right now?)

    Look at CNN (owned by Time Warner, btw.). Did they keep their big mouth shut when Napster was there? NO! They shouted it out for all the world to see: "There's a way to get illegal MP3z on the internet!" Great thing for the mass media: everybody was listening...

    Now how much less people would have known about Napster, if CNN had worked together with Time Warner and Sony and all the others to try to SILENTLY counter Napster?

    Their diversity is our strength ... and as long as they try to fight everything they don't (cannot) control, I'm not their customer, I'm their enemy. Period.

  • Sometimes, free market economics can actually prevent the uptake of a new technology, because it threatens large corporations that have the resources to stifle it before it harms them (see the ongoing battle by the MPAA to restrict internet availability of entertainment content). That is just one example of many "market failures" that government can help work around. Another example would be Medicaid. Under a totally private health care system, the poorest in society would be left without basic medical insurance.

    Most fundamental economic changes have been introduced gradually, in order to minimize the social costs of change (which are many - the dinosaurs you speak of will need unemployment insurance). Look at the growth of world trade, for instance - it has taken decades to get where we are now, and there are still many walls that need to come down.

  • by lpontiac ( 173839 ) on Wednesday September 06, 2000 @05:51AM (#801431)
    I know you all want your free lunch: free songs on Napster without paying for them; free software even though someone busted their ass producing them (KeyGen anyone?); free everything.

    And now Bertelsmann wants free money.

  • by Fnkmaster ( 89084 ) on Wednesday September 06, 2000 @04:52AM (#801437)
    Well, if I'm going to be paying for the right to copy music, then morally there is nothing wrong with hitting Napster and leeching away, since I've already paid for the right to do it. This completely removes any moral imperative to respect copyright laws or to ever go buy the CD of an artist that you actually like.
  • These laws are quite funny. The idea behind them is that you're going to be guilty anyway, that you are going to enfringe the law, so you have to pay. And then if you actually infringe the law and get caught, you'll have to pay damages and possibly face prison?

    Ok, let's pay those criminals (recording industry) their tax, but I want to be able to do whatever I want with their "content".

  • to duplicate copyrighted works? If we've paid a royalty by buying media in Canada or computer equiptment in Germany?
  • I wonder if anyone else realzes (not saying you don't) how taxes like this totally remove the incentive to create more works. Wouldn't it become more profitable to just sit back and collect taxes and not go through the trouble of creating new content? Isn't that opposite of the point of copyright?

    --
  • Umm... Dude the US already has such a tax, so obviously the Supremes didn't have a problem with it. Its a small tax yes, but a few cents of every cd-r and a few dollars of every cd burner goes to RCAA, seriously. And non RCAA labels get none of it.
  • 1) The funds usually get delivered to industry groups that represent the industry's interests, so while the small-time artist won't directly get compensated, the think-tank and lobbyists that represent them will.

    2) Why should the fee go away? Roads and toll bridges require constant, expensive maintenance (to use your example), and people still use VCR's and audio tapes to copy content illegally even after decades - so the "harm" that justifies the fee never really goes away.

    Your last paragraph, while rambling, sounds straight out of PoliSci 101 - narrowly focused, well-backed interest groups can make a killing in Washington at the expense of the broader public interest. That's simply an inherent flaw of the political system, and while it ain't perfect, I don't see anything better in use currently.

  • This relates directly to the CueCat story from the other day. It'd be as if the CueCat people were worried that their revenue model wasn't working, and so asked the government for a percentage of all computers sold.

    --

  • Realize that you see maybe $0.50US of the purchase price of that CD. Realize that they're selling it for anywhere from $10-20US and it cost them no more than $1.50US to make the damn thing, in a jewel box with inserts. If you're relying on the "royalties" from CD sales to make you money, you're a fool because only the mega hits make a performer any money at all. Performances are about the only way a musician makes money these days- and depending on the contract with the recording company, you might not make much there either.

    This is not to say I condone the copying- it's just that I don't believe for one moment that any artist is really getting much in the way of compensation for that CD I'd buy. (So, I've pretty much quit buying CDs and have stuck to what's already in my library of music and listening to the radio.)
  • Of course, the European gasoline taxes go to fund highway costs. In the US, that's subsidized by the income tax, so the burden is spread to people who don't drive as much as well.

    --

  • by jms ( 11418 ) on Wednesday September 06, 2000 @06:00AM (#801460)
    The US gov't does not, and never has, collected any "taxes" that are distributed to artists as royalties. Period, end of story.

    Makers of Music Minidisc, DAT Music Tapes, and Music CD-R discs for sale in the US do throw money into the music industry, but it's the same corporate channels that already existed for music royalties.


    Sorry, but your information is eight years out of date. Read Title 17 Chapter 10 [cornell.edu] if you don't believe me.

    Since 1992, the U.S. Government has collected a royalty on all blank digital audio recorders and blank digital audio media manufactured in or imported into the United States, and handed the money directly over to the RIAA companies.

    The money collected is, as mandated by federal law, divided as follows:

    (1.75%) of the royalties are paid to the American Federation of Musicians, to be paid to "non-featured" musicians (studio musicians)
    (0.92%) of the royalties are paid to the American Federation of Television and Radio Artists, to be paid to "non-featured" vocalists (backup vocalists)
    (25.60%) of the royalties are paid to "featured recording artists", including such bands as Metallica.
    (38.40%) of the royalties are paid to "copyright owners" (the RIAA companies)
    (16.67%) of the royalties are paid to "music publishers"
    (16.67%) of the royalties are paid to music writers, including such bands as Metallica who write their own songs.

    This is completely above and beyond the other systems of royalty payments, such as ASCAP, BMI, where the copyright owners go after businesses to get them to sign licensing agreements. In this case, the royalty fee collection system is part of Federal Law.

    Incidently, if you're curious as to why downloading from Napster is not illegal, or immoral, read paragraph 1008. [cornell.edu] This is what you, the consumer got in exchange for a federal law mandating direct payments from your wallet to the RIAA whenever you buy a blank audio CDR.
  • What's this obsession with free (as in lunch)?

    Oftentimes it's not. I'll give you two reasons why I use Napster (and lookalikes) and none of them has to do with money:

    (1) It's immediate and effortless. Say a friend tells me "Have you heard Foo Qux? It's an awesome band!" It'll take me five minutes (I have broadband) to check them out and decide if I like them or not. Compare that to buying a CD, especially if Foo Qux isn't all that well known...

    (2) There is no good reason (except greed) not to allow me to pick songs (as opposed to albums) I like. From Napster I can pick and choose and most of the time I like 1-2 songs on an album. Should I buy a whole CD just for these 1-2 songs?

    What's the best solution for solving the Napster case? Put an 'MP3 tax' in place! That way, some semblance of justice will be served.

    Thank you very much, I don't want to have "some semblance of justice". Besides, it's highly doubtful that this will be the "best solution", never mind technically feasibility. Frankly, I think that's one of the worst solutions. And why do you think your music will become free? In countries like Canada that imposed a CD-R tax infringing a copyright didn't become any less of a crime.

    Kaa
  • by Pinball Wizard ( 161942 ) on Wednesday September 06, 2000 @06:01AM (#801467) Homepage Journal
    Since Michael saw fit to speculate that Bertelsmann was behind the proposal to tax electronic devices for the benefit of media companies, I thought I should point out just how much Bertlesmann affects us all.

    IMO, Bertelsmann is a monopolist trying to grab as much of the media market as they can, especially in the book arena. They own the largest publishing company and the largest chain bookstore, Random House and Barnes & Noble. They attempted to purchase Ingram Book Company(big distributor-something like 60% of Amazon's books come from Ingram), luckily that was stopped by the antitrust folks in our govt. If they had pulled that off they would have had a complete vertical hold on the book industry - from publishing to distributing to bookselling. They would have profitted from the majority of internet book sales.

    They are definitely a company /.ers should know about and be wary of.

  • by jms ( 11418 ) on Wednesday September 06, 2000 @06:03AM (#801475)
    No matter what you say about these kind of tax policies, they are fairly common. What is even more sad is they arise out of a genuine concern and a desire to do what is right.

    Haha.

    The U.S. version of this law, the Audio Home Recording Act, was drafted by the recording industry with the specific goal of destroying the market for home digital audio recorders.

    Do what is right, my ass.
  • Maybe I'm nuts, but this strikes me as pointing the way toward a method of ensuring artists get compensated, while at the same time allowing people to freely distribute whatever they want. I would be willing to pay extra $$ on purchases of media and recording equipment if that meant music could be free, and the artists would get compensated. The tax could go into a big fund and artists could get payed based on surveys of how much their music is being downloaded. Same thing for authors. You'd be free to do whatever you wanted with stuff. Of course, this plan still doesn't leave much room for the labels, but who cares?

    -Vercingetorix
  • Wow! What a little bundle of misinformation and lies you found!

    Well, the RIAA certainly doesn't want you to know your rights. However, even if you don't know your rights, you still have to pay the CDR and DAT royalties, so you might as well know.

    Rather than explain it myself, here is a quote from the 9th Circuit Court of Appeals, in the document in which they reversed the injunction against Napster. They do a good job of explaining the distinction:

    The court reached its conclusion that Napster users were engaged in direct infringement in part because

    o it ruled (contrary to the section's express terms) that the immunity from suit provided by 17 USC 1008 only applied to actions under the AHRA.
    o it ruled that 17 USC 1008's protections only applied to copying by specifically identified devices rather than, as this Court said in RIAA v. Diamond Multimedia Syst., Inc., 180 F.3d 1072 (9 th Cir. 1999), to all noncommercial copying by consumers. (1)

    (1) The court relied on the fact that this Court in Diamond Multimedia had held (in the context of the AHRA's serial copying and royalty provisions) that digital audio recording device did not include computer hard-drives. The court below ignored, however, that 17 U.S.C. 1008
    permits non-commercial copying by consumers using either analog or digital audio recording devices or "such a device"; that the legislative history makes clear that Congress intended by that language to immunize all non-commercial copying of music by consumers; that the same Diamond Multimedia Court expressly said that 17 U.S.C. 1008 "protects all noncommercial copying by consumers of digital and analog musical recordings" (180 F.3d at 1079); and that throughout the Diamond Multimedia opinion the Court discusses copying of music using computer hard-drives as AHRA protected activity.


  • Are you saying it's not legal to take towels from hotel rooms?

    -thomas


    "Extraordinary claims require extraordinary evidence."
  • by Angst Badger ( 8636 ) on Wednesday September 06, 2000 @06:11AM (#801489)
    C'mon, why do you think Americans pay per gallon of gasoline what Europeans pay per liter? Farm subsidies? Research grants? There are already billions of tax dollars going directly or indirectly into U.S. corporations. Some of it (funding for scientific research) is not such a bad idea, but much of it is a simple quid-pro-quo in return for campaign contributions. And even the taxpayer-funded scientific research tends to go into proprietary, patented products.

    There's not much Americans can say about this sort of thing. We keep voting for the same two parties, and when it gets down to it, we keep voting for the candidate who spends the most on ads. (Okay, in all fairness, two-thirds of the electorate votes unthinkingly for their party, and the remaining third votes unthinkingly for whoever spends the most on ads. It's not like Machiavelli didn't warn us about this.)

    --

  • er, the section you found outlaws the making of "bootleg" recordings without the permission of the artist -- bringing a microphone and tape recorder to a concert.

    Anyway, Chapter 11 of Title 17 is still part of Title 17, and Section 1008 immunizes consumers against any actions "under this title", so I'm not following your logic.
  • You are making the RIAA argument -- that Section 1008 only creates immunity if the copying is done using SCMS-equipped recorders, and royalty-paid media.

    According to the appeals court, the distinction of whether a device (like a computer) is a "digital audio recording device" is only meaningful for the purposes of determining whether it the device/media are subject to the SCMS and royalty requirements.", not for determining Section 1008 immunity.

    Why?

    Section 1008 does not only grant immunity to consumers who use equipment defined in section 1001. It can't. Think about it. The law mandates SCMS circuitry and royalty payments for certain digital recording equipment only. It says nothing about any copy protection or royalty payments on analog equipment and media. Yet, the law creates immunity for use of analog as well as digital equipment and media. How can this possibly square with the RIAA interpretation? What are analog equipment and media doing in Section 1008, if section 1008 is only supposed to apply to SCMS-equipped/royalty paid equipment and media? Obviously, Section 1008 does not only create immunity when used with restricted and royalty-paid equipment, because it creates immunity for analog equipment as well! The appeals court actually thought about the law, reviewed the Diamond Multimedia case and determined that Section 1008 protects all non-commercial copying by users, not just using certain equipment.

    This makes sense, because the purpose of the law is to stimulate a legal market for digital recordings, while avoiding the "grey areas" that would immediately arise under the RIAA interpretation.

    As an example, you take an old record of yours, blow off the dust, and play it back on your turntable. You connect a Digital Audio Tape recorder to your receiver, and make a DAT tape of your record, on a SCMS-compliant machine, on a royalty-paid tape, for your own enjoyment.

    Do we both agree that you're protected under Section 1008?

    Ok. Now, you notice that the recording has pops and clicks. You want to eliminate them, so you take the DAT recorder over to your computer, connect it to your SPD/IF equipped soundcard, and read the recording onto your hard drive. You use Sound Forge, or a similar tool to remove the clicks, and add track marks, then you burn the final recording onto an audio (royalty-paid) CDR, and re-use the DAT tape.

    Is your final CDR legal or illegal? Did it become illegal when you copied it onto your hard drive? Did it become legal again when you moved it onto a CDR? What is the correct public policy to best deal with this issue?

    The only interpretation of section 1008 that avoids this problem of "tainted" intermediate recordings is the one provided by the appeals court -- that Section 1008 immunizes all non-commercial copying of musical works by consumers.

  • 5-pack of 'Audio only' Maxell CD-R, at BestBuy: $9.99. 5-pack of 'Data' CD-R, same specifications, same manufacturer, same store: $5.99.

    (I was there at lunch, bought a mislabelled 50-disc spindle of Sony for $19.99 ;)

    This is typical of the CD-R pricing scheme. I assumed the inflated price was because of the tax. Silly me!
  • For what it's worth, Carver in the movie was an international media mogul who owned media outlets in many countries, including Germany. But I think that the movie never mentions Carver's nationality or his company's corporate headquarter location.

    (Hamburg, one of Germany's major media city, was used as a filming location to please the many Bond fans here. I am told that Germany is the major non-US market for Hollywood.)

    ------------------
  • Check that $500 hammer story, that is a reasonable price for that hammer. (Accually I think it was $600)

    What the media story never mentions is the hammer is needed in an enviroment where explosives are used. The hammer was made of a special non-sparking metal so that it could be safely used.

    Likewise the $200 toilet seat was not sent to an office building, but to a area where more was required of the toilet seat. (I can't remember if it was the space shuttle, or something else)

  • by Hanno ( 11981 ) on Wednesday September 06, 2000 @06:22AM (#801502) Homepage
    However, it is far too easy to point at Bertelsmann and as you already noted, it was Michael's speculation that he simply presented as fact.

    "Stupid German media legislation? Let's see. Bertelsmann is German, right? They must be responsible!"

    Yes, Bertelsmann is *one* of the many companies behind this idea, but basically, all the German media content companies are supporting it and here in Germany, Bertelsmann is not singled out as the one company responsible for all stupid media legislation.

    Also, this kind of "tax" has been very common in Germany since decades for music records. The system is called "GEMA" and they collect money from every sale of a record, from every public concert performance of a song and from every public broadcast of a song on radio or TV. This money is then given to the authors and composers of that song. While this approach is *very* bureaucratic and scary, it works surprisingly well (I am affected by this as a pseudo-professinal musician).

    There is a similar fee on copiers, fax machines and scanners. If I am not mistaken, this is what they are now trying to extend on other "copying devices".

    Yes, Bertelsmann is big, it is scary, I certainly don't like them either and I don't like this idea of "taxing" computers as digital copying devices. But still, this is not "the Bertelsmann tax".

    ------------------
  • by Nezumi-chan ( 110160 ) on Wednesday September 06, 2000 @07:52AM (#801504)
    Maybe I'm reading this wrong...

    Yes, indeed you are.

    BUT: somehow, you say that the expense of producing copies of an artist's work without permission is OK as long as you pay for it?

    The trouble is, the person you replied to (and the people who replied to you) didn't word this very clearly. the concept is simple:

    The powers that be assume you'll steal, so they charge you via a tax for this potentially stolen material.

    Since you haven't actually done anything yet, you've just paid for a product that you haven't received.

    Therefore, you are the one who has been stolen from. So in order to make this transaction complete and valid, you now need to get something in exchange for your money from them. Which is to say, downloading some piece of music.

    All of the above, of course, means that since you've already bought the song via a tax, there is no real basis for them to claim they're losing money off Napster (or whatever) downloads and CD-Rs.

    Hopefully, that's a little more clear.

  • by Inoshiro ( 71693 ) on Wednesday September 06, 2000 @06:25AM (#801507) Homepage
    Maybe I'm reading this wrong...

    BUT: somehow, you say that the expense of producing copies of an artist's work without permission is OK as long as you pay for it?

    I think this logic train derailed somewhere near the love canal....

    Things that are OK: protesting unfair price gouging, protesting unfair fair-use removal (like this guilty until proven innocent tax).

    Things that are not OK: randoming warezing and copying anything you bloody well feel like just because you can. If everyone did things because they could, the GPL and the like wouldn't be enforcable. That's Bad.

    In conclusion: how did "I paid for a burner so I can warez" get to +4?!

    --
  • by Sloppy ( 14984 ) on Wednesday September 06, 2000 @06:26AM (#801509) Homepage Journal

    It may be a 'big evil corporation' that's charging you money, but you still owe it to them.

    No you don't. You might owe it to them. More likely, you owe it to someone else, or no one at all. If an unsigned garage band burns from CDR demos to send out to reviewers and fans, please explain how and why they owe money to some arbitrary record label who will use the money to promote some pop star. If I copy a CD published by media company A so that I can listen to it in my car, why does media company B get a cut of the CDR sales revenue?

    If you're so against things being free, then why do you defend the media companies getting this unearned money for free?


    ---
  • This would be similar to saying that it's OK to steal towles from a hotel room, since part of the rates you pay are to cover stolen towles.

    If my bill includes an itemized charge labelled "Towel Replacement", I will be taking what I have purchased; I will not be stealing.
  • This is kind of like a low-key version of Double Jeopardy, is it not?
  • Finally, it's something that can be hated by both libertarians and anti-corporatists.

    --

  • We were talking about the corporation-state yesterday. Try to keep up, OK?

    -

  • Ah, but Napster doesn't distribute files. Napster's users share files with each other. Big difference.

    Back to the paragraph in question, Paragraph 1008:

    No action may be brought under this title [Title 17, Copyright Law] alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.

    The issue before the court was whether Napster is liable for contributory infringement -- i.e. are they operating a service that other people -- their users -- are using to break the law?

    The answer is, no. The activities of Napster's users are fully protected by the AHRA.

    Hence, if there is no infringement taking place, there can be no contributory infringement.

  • except that this is simply the RIAA's interpretation of the law; if you read the actual text of the law [cornell.edu] it says:

    3) A ''digital audio recording device'' is any machine or
    device of a type commonly distributed to individuals for use by
    individuals, whether or not included with or as part of some
    other machine or device, the digital recording function of which
    is designed or marketed for the primary purpose of, and that is
    capable of, making a digital audio copied recording for private
    use, except for -
    (A) professional model products, and
    (B) dictation machines, answering machines, and other audio
    recording equipment that is designed and marketed primarily for
    the creation of sound recordings resulting from the fixation of
    nonmusical sounds. "

    A sound card (particularly those marketed/designed for mp3s, such as the Creative SB Live Mp3) or CD drive (if appropriately marketed) could easily be considered to be the "device of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device". Thus general computers could fall under the AHRA by virtue of including the sound card or CDROM, which is the actual recording device.

    It gets a little more into a gray area once you start talking about the recording medium. The law states:

    4)
    (A) A ''digital audio recording medium'' is any material
    object in a form commonly distributed for use by individuals,
    that is primarily marketed or most commonly used by consumers for
    the purpose of making digital audio copied recordings by use of a
    digital audio recording device.
    (B) Such term does not include any material object -
    (i) that embodies a sound recording at the time it is first
    distributed by the importer or manufacturer; or
    (ii) that is primarily marketed and most commonly used by
    consumers either for the purpose of making copies of motion
    pictures or other audiovisual works or for the purpose of
    making copies of nonmusical literary works, including computer
    programs or data bases.

    If you're recording to hard disk (as opposed to, say a CD-R) then it's a little more gray - few hard disks I know of are primarily marketed or most commonly used by consumers as audio recording devices (granted, a lot of people use them in this way, but right now I don't think it's the *primary* use for most people).

    Also keep in mind that the courts' job is to interpret the laws...and if one reads the AHRA, it seems clear that the intent of Congress (in Title 17, Chapter 10, Section 1008) is to allow consumers to make digital and analog copies for their personal (non-commercial) use. While IANAL, I would expect the courts would find in favor of any consumer who had an action brought against them for personal digital recording on their PC.

    (text of Section 1008):

    "No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings."
  • by technos ( 73414 ) on Wednesday September 06, 2000 @06:35AM (#801534) Homepage Journal
    Lemme get this straight.. I pay $7.50 for $4 of CD-R at the local CompUSA, three-fifty goes to the 'tax'. If I use them to pirate some big name band, the band makes more money than if I had bought the CD?

    Pirate away boys! It seems it's the only way to support the artist!
  • If one is a content author, how do they go about getting their money? Are they exempt from the tax? Does 'fair use' exist in Germany?
  • They have sales taxes on booze and cigs and gasoline, and even regular every day food...This is extremely typical of a government who wishes to keep an industry afloat.

    This isn't analogous to this particular tax in this story. The taxes you mention have nothing to do, AFAIK, with "keeping an industry afloat". Do you think cigarette taxes go back to Philip Morris et al? Or your tax on every gallon of gas goes to petroleum companies, or to the auto makers? I don't see anything in this tax that indicates the revenue will be paying for govt services. If I buy a computer, I may never use it for any media purposes whatsoever..it might sit in my basement crunching numbers and never play a CD, movie, etc....but the lawmakers want me to pay extra for my computer so that money can go to movie and music execs.

    So, why don't Kodak, Agfa, Fuji etc get into this and get some tax monies from computers, after all, people are using computers to store and send copies of photographs and this cuts into photo film and processing revenues!

  • Sure, fine for the publisher to try and make deals with the hardware manufacturers. But doesn't it strike you as a bit scary when they go to the government?

    --

  • They do this because statistically those demagraphics cost them more to insure. 16 year olds are more likely to get in accidents than 35 year olds. This is more a facter of inexperience than breaking the law.

    This is something else that blows my mind... The insurance companies get away with sex / age discrimination, while I would get arrested for it.

    What's so different about saying "Well blacks tend to rob more houses than whites" and "male 16 year olds tend to get in more accidents than married 35 year old women" ??

  • by jburroug ( 45317 ) <slashdotNO@SPAMacerbic.org> on Wednesday September 06, 2000 @11:46AM (#801550) Homepage Journal
    Taxes are law, insurance is a private transaction, and they must be held to different standards.

    Sorta, don't forget that a certian level of liability insurance is required by law to legally drive in the US. Because the state mandates buying private insurance to drive, yet doesn't regulate the price of the mandated coverage there is very little price competition for liability only insurance. This makes it very easy for insurance companies to ream younger drivers.
    I've been buying insurance for years and never used it once, despite a clean accident history, a state approved safe driving course etc... I still count as an inexerpianced dangerous drivers for three more years (when I turn 25) and get shafted on the insurance. It's not precisely like a tax but it's pretty damn close.

  • Imagine for a sec that the price of CD's is US$15,000 and the tax on all electronic equipement is 3000% - 'to compensate the artists, you understand'.

    Is that world one in which artists are all incredibly wealthy captains of art? Are the record companies merely low margin distributors scraping along on whatever they can skim?

    I don't think so.

    You see record and media companies specifically push the risk of content development to the artist in the form of "recoup". That is where they advance or loan an amount to the artist to produce his/her own CD, Video, whatever. Think of it like a book advance except the price of typing paper is $40/sheet. All of that "recoup" is advanced against all of the money that eventually comes back to the artist. How much is that you say?

    In the recording industry at least, 5% is considered generous, 3% is more average. That's 3% of what the record company gets back from sales less their overhead which includes marketing, distribution, coop advertising, etc. taxes, etc.

    Assume for the purposes of this mental experiment that this figure is 25%.

    Now retailers buy units recover their costs out of sales. Let's be generous to the retailer and guess that the markup is 50%. So the record company gets 8 bucks a pop.
    8.00x0.75x0.03 or.....

    18 cents a unit from which the "recoup" is recouped. So lets figure its a monster hit CD and sells 1 million copies. That translates into $180,000 from which the artist now has to give back the production costs of the CD itself as well as the video and a portion of the production costs for a related promo tour.

    Let's use round numbers and say that the CD costs 50,000 to develop and the video another 50,000.

    That leaves $80,000. Deduct say a quarter of the cost of a promo mini tour; make this about $25,000. That leaves our artist with $55,000.

    Do the math. The net profit margin before taxes to the artist is 55,000/16,000,000 is

    0.0034375 or roughly 0.34% that is zeropointthreefourpercent.

    Are we starting to see the light????????

    Record companies are designed to pay nothing to anyone. What is the point here? I'll tell you. Napster is not the problem. The distribution mechanism is not the problem. Changing the distribution mechanism which is really all that Napster is, is not the problem. Cutting the retail cost to effectively ZERO would not materially change the economics to the artist. The problem is how record companies treat artists which is the closest thing to indentured servitude we have.

    Do the math people. Do the math.
  • by Hairy_Potter ( 219096 ) on Wednesday September 06, 2000 @04:58AM (#801553) Homepage
    I'd start tossing things out if I was forced to pay taxes to corporations. Didn't something like this happen in the 1700's?

    Yeah, yeah, there was the American Revolution in the 1770's which freed America, but that was against the British, they only had to learn the lesson once, one war, and they were gone.

    The Germans have to be reminded every few decades, or they get upppity again.
  • (ii) that is primarily marketed and most commonly used by consumers either for the purpose of making copies of motion pictures or other audiovisual works or for the purpose of making copies of nonmusical literary works, including computer programs or data bases.

    Sounds like this excludes something that makes copies of computer programs, like a high-speed cd duplicator, but not a PC as that is not its primary purpose.

    sulli

  • No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.

    The highlighted sentence refers to the distribution of a device or medium - it says nothing about the recording. Read the definition section [cornell.edu] -

    (3) A ''digital audio recording device'' is any machine or device of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device, the digital recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use, except for - (A) professional model products, and (B) dictation machines, answering machines, and other audio recording equipment that is designed and marketed primarily for the creation of sound recordings resulting from the fixation of nonmusical sounds.

    (4) (A) A ''digital audio recording medium'' is any material object in a form commonly distributed for use by individuals, that is primarily marketed or most commonly used by consumers for the purpose of making digital audio copied recordings by use of a digital audio recording device. (B) Such term does not include any material object - (i) that embodies a sound recording at the time it is first distributed by the importer or manufacturer; or (ii) that is primarily marketed and most commonly used by consumers either for the purpose of making copies of motion pictures or other audiovisual works or for the purpose of making copies of nonmusical literary works, including computer programs or data bases.

    These definitions refer to CD-Recorders, Hand-held MP3 players, and MP3 encoders as devices and CDRs, CD-RWs, DAT tape for mediums. I would say the MP3 codec would qualify as a medium. However...

    (1) A ''digital audio copied recording'' is a reproduction in a digital recording format of a digital musical recording, whether that reproduction is made directly from another digital musical recording or indirectly from a transmission.

    Once you record music onto the digital music medium it becomes a digital music recording. This is what the actual MP3 song files would fall under. The MP3 codec is the digital music medium that is "most commonly used by consumers for the purpose of making digital audio copied recordings by use of a digital audio recording device." Now re-read the section 1008 [cornell.edu] - You can distribute the CD Burners, MP3 encoders, and even the codec all you like. Do you see any mention of digital audio copied recording? I sure don't. Guess Napster is still illegal as far as this piece of legislation is concerned.

    Think before you post, maybe?

    I do. Maybe you should research the source material before you flame someone.


    -------

  • by TheGratefulNet ( 143330 ) on Wednesday September 06, 2000 @04:58AM (#801559)
    yes, this is logical. if the authorities are saying "we know you're copying copywrited works - you have a computer so you MUST be guilty of this. so lets dispense with trials and such and just slap a fine on you. you know you're guilty - just pay the fine" then I guess since we've already been judged and are paying the fine, we at least owe it to ourselves to enjoy the fruits of our 'crimes'.

    don't they see that this promotes breaking the laws?

    its like a cop that stops you before you enter a very fast highway and says "we're collecting in advance for any speeding you're likely to do". who in their right mind would NOT speed after being charged for it? especially if your car is up to it.

    ...and the fight escalates further.

    --

  • I am told that Germany is the major non-US market for Hollywood.

    And as Norm MacDonald once pointed out on Saturday Night Live's "news" segment, Germans love David Hasselhoff - and what could be more Hollywood than his Bay Watch?

  • At least the whole cd-burner type concept, in the sense that I seem to recall somewhere that for every blank cd manufactured (i dont recall if magnetic tapes are included) a fee must be paid to the RIAA/MPAA (or one of those acronyms people cringe at) seeing that the product essentially could be used for "copying" something that they own? I think I'm recalling this from a conversation about the difference between blank cd's for "audio only" and regular blank "computer" cds. Granted, I can't recall the outcome of the conversation anymore, but maybe some of you know the answer..

  • What we're trying to say here is that the government is acting as a central clearinghouse for collecting royalties that would be otherwise be paid directly to the corporation?

    If I was a manufaturer, I think it would be easier to cut one check to the government than having to pay a multitude of different corporations individually. I mean, lets face it, the government is more efficent at collecting money than any corporation you can name.

    But thats only if the royalties in question would be collected anyway. If the government is inventing new "royalties" (or taxes if you prefer), and then giving them to the corporations, thats bullshit.

    But part of playing the game with M$ or Sony or whatever is royalties. If I was in a position that I would have to pay, I would rather use a efficent and centeralized entity to pay them.
  • For some reason "flat tax" seems to mean two things that imho are totally unrelated.

    First it means "simplified tax" where your "income" (or whatever is taxed) is a "simple" calculation, for instance it is how much money you were paid this year and there are no deductions.

    Second it means "flat" in that the formula for figuring out how to convert this "income" to "tax" is to multiply it by a constant.

    What I can't figure out is why everybody seems convinced that it is impossible to seperate these two ideas. Why can't the calculation of "income" be simplified, but you still use a tax table (and thus progressive) tax? (conversely, why can't you flat-rate a very complex income calculation like we have currently, a scheme big business would love...)

    Without simplification, flat taxes are not going to do anything. Coorporations are actually taxed at a very high percentage, the reason they don't pay much is that they are able to deduct almost everything before this percentage is calculated.

  • We don't like Hasselhoff. But we *love* Yanni.

    ------------------
  • What is it with copyright holders thinking that they have a right to tax/suppress anything and everything that might possibly infringe on their copyrights, or potentially cause them to lose profits? Banks don't tax car companies, even though everyone knows about the "getaway car." Emergency rooms don't tax knife and gun makers.

    And yes, it's absurd to call it a "tax" when it goes straight to a corporation. They get enough government money already. (See sig!)

    ---

  • As far as I can tell, this section would in no way protect Napster or Napster users.

    Ah, but Napster's users are making non-commercial recordings of music files, and making non-commercial recordings is protected by the AHRA.

    Since Napster's users are engaging in non-infringing activity, Napster cannot be contributing to copyright infringement, because there is no infringement!

    But this does open up a whole new can of worms. If I have the Fair Use rights for music, movies, etc that I legally purchase, why the hell am I paying a tax on a medium that I use for non-commercial, personal duplication?

    First off, this law only applies to copyrighted audio works, not movies.

    Secondly, the AHRA does not provide a fair-use defense. The AHRA provides something much, much stronger. It provides a statutory excemption from copyright infringement. This is very, very different. With Fair Use, the court is required to consider exactly how you are using the music, and decide whether it is fair or not. With Paragraph 1008, the only issue before the court is whether or not the consumer's use of Napster is non-commercial in nature. Not Napster itself, but the consumer's use of Napster.

    You ask a good question though. Why does this tax exist? Where the hell did it come from.

    The answer is that in 1992, the RIAA came to Congress in a state of panic. Digital Audio Tape was about to hit the market, and according to the RIAA, the entire recording industry was about to be destroyed! (sound familiar?) The RIAA wanted to destroy DAT, and they decided that they best way to do it would be to require SCMS (Serial Copy Management System) copy protection hardware on all DAT recorders. SCMS is basically a two-stage copy protect flag. It lets you make a copy of a DAT, but not a copy of that copy.

    While they were at it, the RIAA got Congress to toss in those mandatory royalty payments on blank media. Those few of us who were using DAT tapes for our own purposes -- taping our own bands, or taping Grateful Dead concerts -- were outraged. From now on, aspiring musicians who wanted to make professional quality recordings of their own songs would be required to pay an "RIAA tax" for the privilege of doing so. Hell, none of us ever noticed paragraph 1008. It never occurred to us what it meant and what the ramifications of it were. Turns out the American public received an incredible bargain, while the RIAA was busy writing what it considered as nothing more then a new law designed to kill DAT technology.

    Congress had noticed a problem ... if consumers were to henceforth pay royalties on blank digital audio media directly to the recording industry, to compensate for personal, non-commercial copying of music CDs, then Congress would have to fully legalize and protect the activity that it was now collecting royalties on.

    There are certain laws, such as excessive taxes on marijuana, that are designed to function as a punitive measure, but this tax is obviously not one of them. Congress was tired of the RIAA running to them in a panic whenever a new recording technology came out, and wanted to establish a law once and for all -- a law that would cover all existing and future technologies.

    Both Congress and the RIAA presented this law to the public as the "enabling legislation" that would break the legal logjam, and bring digital audio recording to the masses. Of course, once the law was passed, DAT faded into the background, and this law was mostly forgotten, except of course by the RIAA companies, who have quietly collected the royalties for eight years now.

    The only thing that has changed since the law was written and passed eight years ago, is that the internet has finally made it possible for consumers to realize the benefits of the AHRA, instead of just the RIAA benefiting from the AHRA, and boy is the RIAA mad about that.

    And more importantly, why the hell is money going to the RIAA for the CDRs I purchased to back up my programs, pictures and email?

    The royalties are only collected on media that are branded for audio use. Most CDRs are branded for data storage, so they are not subject to the royalty requirements. Ironically, DAT tapes and DDS cartridges are identical; except that DDS cartridges are of slightly higher quality and cost a little less, so even DAT users can easily avoid paying the "RIAA tax" on their media if they so choose, or if, as is more commonly the case, they are simply unable to find DAT blanks because the RIAA has so successfully buried the medium in the semi-professional market.

    This law is already out of date. There are so many more uses for CDR and CD-RW beyond music recording.

    But the law only applies to recorders and media that are branded as audio recording devices and media. If you want to store video files on CDRs, simply purchase data CDRs, and you won't pay the RIAA royalty. If you are feeling guilty about downloading from Napster, then store your MP3s on audio branded media, and the RIAA companies will receive a royalty payment.

    Your ethics, your choice.
  • Do you remember Tomorrow never dies ?
    A big multimedia company settled in Germany and which could easily force governments to do what they wanted ?
    Here they are: playing once again the game of picking up money in the name of the artists and just about to keep these billions.
    I think this would have more weight and credibility if the artists could just ask themselves whatever they want to he public.
    --
  • They are doing this since decades over here and the story above is about how they want to extend this from copiers, tape recorders and fax machines to computers and mp3.

    ------------------
  • by jms ( 11418 )
    Does noncommercial use entail distribution on a scale possible by Napster? Also, Napster is a business - how does that commercial "service" figure into noncommercial use by the consumer.

    There's plenty of businesses that exist for the sole purpose of helping you to exercise your rights.

    Xerox manufactures photocopy machines. Millions of people use them daily to copy pages out of copyrighted works for legitimate fair-use purposes, and probably lots of people use them to make infringing copies of things. Sony manufactures VCRs. Millions of people use them daily to make millions of copies of the Oprah show, so they can watch it later (legitimate time-shifting fair use), and probably lots of people use them to, for instance, rent a movie and make a copy for themselves (infringing). Napster runs an indexing service. Millions of people use Napster daily to make copies of songs.

    The main difference between Napster and copy machines and VCRs is that only with Napster is it actually possible to see the sum total of what is going on. If, somehow, there were a billboard in Times square that did nothing but show a running list of all the magazine articles that were being photocopied by all the copy machines in the world, or a running list of all the video programs being videotaped by all VCR users in the world, it would be jaw-dropping. The display would be moving so fast it would be a blur. It would make Napster look like nothing.

    what is the legality of Napster providing a commercial service to facilitate this?

    What is the legality of a service that facilitates legal activity? Honestly, I can't think of an example where an activity is legal, but facilitating that activity is illegal ... possibly distributing marijuana to cancer patients in California, but that situation is in a complete state of flux, under current litigation, so that's not really a good example.

    I suppose that's the key wording anyways - "under this title". Assuming the RIAA doesn't allege infringement under title 17, this won't hold any bearing.

    But all copyright law is under Title 17. If the RIAA isn't suing under copyright law, what law can they possibly sue under?
  • Well the companies in question are into squeezing every penny out of the consumers. While they no doubt enjoy collecting royalty fees on blank media (Which is, I have to admit, the most beautiful scam I've come across in a long, long time) no doubt they will continue to create new things, if only to release them in an encrypted format that it's illegal to break so that they can force their happy pay-per-view vision of the world on the consumer. And you know that even when all their new releases are encrypted from disk to speakers that they'll still collect royalties on blank media.
  • The deal underlying this kind of legislation is that consumers are legally permitted to make copies for non-commercial use. That's the deal in Germany, and that's the deal in the US (where similar taxes exist on digital media like CD-R's).

    So, unless you copy for commercial purposes, it isn't "warez" and it isn't "without permission". You have permission. Go and copy to your heart's content. As I understand the law, you can even give copies to all your friends, as long as you don't charge for it.

  • I am disgusted by arbitrary taxes on any consumer electronics devices, and now, it seems, computer devices.

    From where does the United States government derive the right to tax on behalf of Sony?

    Is this why the Philips CD-R stereo component costs about $200 more than a similar computer CD-R drive?

    --
  • Do you see any mention of digital audio copied recording? I sure don't.

    It's there.

    No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.

    The Court of Appeals that reversed the Napster injunction decided that "such a device or medium" includes any device that can hold music recordings, not just the small subset of devices and media branded and intended specifically for recording music that are subject to the AHRA's SCMS and royalty requirements, and specifically, that hard drives are just as protected as audio CDRs.
  • Not necessarily. The argument is that Napster is a commercial enterprise and derives commercial gain from supporting the distribution of copyrighted work.
  • to duplicate copyrighted works? If we've paid a royalty by buying media in Canada or computer equiptment in Germany?

    I'm Canadian and I get to deal with that stupid CDR tax all the time. If you're a Canadian citizen, please write your MP and explain to them that there is something fundamentally wrong about paying a tax who's justification is that you are committing an extremely serious crime (in the eyes of the law). Does purchacing CDRs effectively mean you're signing the bottom of the ticket? IANAL. It seems messed up to me though.

    How would you feel if the _government_ decided that there should be a shoplifting tax to compensate all the store owners that _might_ have lost money when something was stolen? Using the fscking RIAA mentality, this should happen to reimburse them from people swiping CDs out of stores. I'm sorry, but that all sounds a little commie red pinko for me. And I'm Canadian!

    I won't even get started on the fact that most artists are unsigned and will not ever see a bloddy penny of the collected tax, "for their benebit". Just like the fuel taxes I think about when I go over the Toll Highways, which are part of the formerly free TCH. Oh well.

    Let your MP know how you'll be voting.

  • They're going to have to change Civ:CTP to reflect that...

    If you're paying royalities on every device and all media you buy, I'd think that'd pretty much make it open season on content. You already paid the company for it, so why not copy to your heart's content?

  • Unfortunately, the stats could be easily used to back that up simply because there is a higher percentage of poor black males than poor white males and poverty is one of the major causes of crime.

    I think this also highlights a common way people lie with statistics. Skin color isn't the real determining factor here (e.g. the crime rate for middle-class black males and white males would be pretty similar) but it could be made to look that way by someone carefully selecting the numbers.

    Insurance companies spend a great deal of time maximizing their profits in this fashion. They've got one set of statistics used to justify higher rates for young male drivers when their own accounting figures show that young female drivers are more expensive to insure. Those statistics will be used to justify raising rates for females. Since the insurance companies' rented politicians have made many of their services mandatory, it's not like you have a choice to stop playing what is basically a rigged game.

  • Actually, if you are in Canada, just order your media from the US. No levy will be charged.

    The levy must be paid by the importer, but ONLY IF IT'S being imported for resale. If you are importing for your own use, there is no charge.
  • > don't forget that a certian level of liability insurance is required by law to legally drive in the US.

    Not true.

    We ALREADY have the RIGHT to travel. Why do people keep going to the government (who is supposed to SERVE US) and ask permission for rights they already have?!

    Please read before replying:
    Driver Licensing vs. the Right to Travel [teaminfinity.com]

    Cheers
  • Assuming you only buy CD-R media with the tax. In practice, this would simply be a huge gift for mail order / ecommerce types and I imagine the French businessmen would love this. In the US, the high taxes on cigarettes are becoming a joke because the various indian tribes are making a fortune because they can sell them tax free.

    Of course, since most pirating is done in Asia (some operations have large factories and crank out bootlegs in 10,000-100,000 unit quantities daily) I think the only real effect would be a kick in the nads to legal businesses when the recordable media market slows.

  • 2) Why should the fee go away? Roads and toll bridges require constant, expensive maintenance (to use your example), and people still use VCR's and audio tapes to copy content illegally even after decades - so the "harm" that justifies the fee never really goes away.
    The ongoing maintenance costs of something like a road or bridge are much lower than the cost of constructing it. Almost every time this sort of thing gets attention, it turns out that the real reason the toll hasn't been lowered or eliminated is that it's been used to keep various politicians' pork-barrel projects afloat.

    It's much easier to reallocate money from something else than justify a new tax to pay for it. (Witness the way most of the cigarette money, allegedly to be spent on treatment and prevention, is paying for completely unrelated things)

  • by TopShelf ( 92521 ) on Wednesday September 06, 2000 @05:03AM (#801615) Homepage Journal
    Has anyone considered what an extraordinary situation it is where government tax collectors are collecting taxes which are funneled straight to corporations?

    The government often does something like this, in order to compensate the "losers" during a time of drastic change in the economy. The hard part is making sure that the level of compensation is appropriate, and that small-scale victims (independent book publishers, for example) are treated fairly alongside the mega-corporations who are able to pay a lobbyist to keep within arm's length of legislators at all times.

    If done correctly, this could actually help the publishing firms move their business in a new direction, by encouraging (financially) their participation in the New Economy.

  • It's not absurd when you consider that the 50% tax I pay means I live comfortably but am annoyed at the government's spending policies. 50% tax for someone on minimum wage is the difference between living indoors or on the street.

    The answer is for a certain minimum level to be tax exempt to provide for basic accomodations and food. It would make sense to have something like a $20K base and x% of any income above that.

  • You answered your own question with that post. Roads are a perfect example of a market failure (underdevelopment of public goods) that can be corrected via government action. Under a purely market-driven system, no single entity would find it worthwhile to build the road system that we have in place today - you need a government, representing the public interest to make that happen.

    Quick answers to your questions would be 1) It looks like Napster is pretty much getting snuffed (similar apps that survive will do so for now as an underground activity), and 2) it's the force of the market that compels these companies to put the clamps on something like Napster (if they don't squash it, they won't be able to charge $20 CD's anymore). In a controlled economy, innovation from the outside is by definition not present.

  • Take Bill Gates for example, he siphons the labor of thousands of students educated in state-run colleges and institutions. These students pay tuition, but a vast number of them get subsidies from the govt to attend school.

    Since the average American is not as rich as Bill Gates, a flat tax leaves a disproportionate responcibility on the bottom 99.9%. Yet, Bill Gates undeniably reaps a huge personal benefit from public education. In fact he reaps a much larger benefit that I do.

    I hope we can all agree that public Universities are a good thing (an educated population is an effective population). So Bill Gates recieves (other that the warm fuzzies I get about higher education) a larger chunk of that pie than I do, yet under a flat tax, we pay the same.

    This argument implies that somebody who gets lucky in Vegas and blows the money on wine, women, and song should not be taxed at a particularly high rate, since he is not tapping any particular governmental infrastructure.

    The fallacy, obviously, is that Bill Gates has already paid for the benefit of those highly-educated employees, unless he has somehow managed to find people smart enough to write Windows 2000 [pause until laughter dies down] and dumb enough to accept the same pay as uneducated burger-flippers.

    Fees charged for services rendered. That should be pretty straitforward right?

    That turns out to be one of the two main arguments in favor of a flat tax, when spurious arguments about what constitutes "services" (see above) are stripped away. The other is as follows:

    The fundamental flaw of a graduated "progressive" tax is that it lends itself to one of the oldest political scams -- he who robs Peter to pay Paul will have the support of Paul. A graduated tax system combined with equal votes makes it too easy for the politicians to set up a bread-and-circuses system under which a minority of Peters support a majority of Pauls.
    /.

  • I wonder, if government went to a full-on libertarian practically-anarchist sort of approach- would the harms of obliterating social services be offset by the benefits of obliterating corporate welfare that penalises small business and forces small business people to pay taxes to their corporate competition?

    Or would they just shoot all the poor and sell the bodies to Procter+Gamble? :P

  • Well, that's what you get when you start trying to compensate people based on who seems more 'deserving'.

    I hope someday to be popular and charismatic enough to merit having money forcibly rerouted to me by the government. ;)

  • The answer is for a certain minimum level to be tax exempt to provide for basic accomodations and food. It would make sense to have something like a $20K base and x% of any income above that.

    And, in fact, most proposals for a "flat" tax do precisely that. They include two levels of graduation (0% up to a certain income, x% above that income level).

    By insuring that the only way to raise taxes overall are to increase the percentage x or to lower the income threshold, this insures that tax increases affect the bulk of voters (the middle class). This keeps the characteristic disease of democracies (bread-and-circus politics) in remission.
    /.

  • Many people here suggested that if they pay the tax, then they legalized their copies, and consider that as some sort of joke.

    Well, actually, it's that way already. Copying music and movies for private use is legal in Germany (as far as I remember it's also that way in the US), and those taxes are intended to repay the missing income to the authors (wether the _authors_ will ever receive them is another question...). The illegal thing is to publicly make other IP available (e.g. on a website) while it'd be legal if you e.g. emailed MP3s just to your friends over here.

    That does not mean, though, that I'm supportive of this system, especially as in its incarnation over here it has some nice side effects: If you e.g. publish a proper CD of your own music and later on want to offer the same as MP3s on your homepage you actually have to pay GEMA (that's the organization collecting most of these "taxes") fees for publicly offering your own music for copying ;-)
  • by tchuladdiass ( 174342 ) on Wednesday September 06, 2000 @05:06AM (#801645) Homepage
    This would be similar to saying that it's OK to steal towles from a hotel room, since part of the rates you pay are to cover stolen towles.
  • by slim ( 1652 ) <john AT hartnup DOT net> on Wednesday September 06, 2000 @05:06AM (#801647) Homepage
    Only on Saturday, I was reading an opinion piece in MCV, the UK trade magazine for the gaming/interactive entertainment trade, in which someone high up in a games development company was calling for a £30 levy on every CDR, at the factory, simply because it could potentially be used to pirate software.

    I guess this is outrageous to all of us - sure it would probably stop the piracy of PC and PSX games in its tracks -- but it would also prevent me from (say) backing up the digital photos I took on holiday, or burning audio CDRs of campfire songs I recorded onto minidisc a couple of months ago.

    We need to be aware that those in charge of "content" are blinkered to this kind of legitimate use for storage media. We need to remind them that piracy isn't all it can be used for, else they will eventually persuade governments to go through with this kind of taxation.

    NB: the same guy went on to say "without CDs, these people will use their hard disks. Tax those too."
    --
  • I won't even get started on the fact that most artists are unsigned and will not ever see a bloddy penny of the collected tax,

    Actually, it's even stupider than that ... it's only CANADIAN artists on CANADIAN labels that get this divvied among them.

    Now, while it is true that probably 2/3 of the CDs I burn are audio CDs, I have *never* *once* burned a single song by a Canadian artist on a Canadian label.

    So this tax is the veritable apotheosis of a government policy; it steals from the innocent to give to the undeserving while being completely orthogonal to the problem it purports to address.

    I also agree very strongly that in any world that makes pretensions to logic you don't punish people for a crime they might POSSIBLY commit. *shakes head* Whatever.
  • Actually if this is done right it could be a good thing. We could finally be seeing some efforts to create new business models where part of the profit from the tools you buy to listen/copy/share the material you want are distributed among the material creators. Now the only problem is that it is not presented as an alternative or a new way to do things but rather as an additional taxe.

    I'd rather pay a little more for a device but be able to share the music/movies I buy for less with others than to pay what I pay now and being threatened to be sued each time I try to share stuff. If only they could do this right it could become the first step towards the new way to do it...
  • Urban myth.

    The federal government was supposed to provide a set of common 'ground rules' for the states to build on. (It's since twisted into the behemoth we know and loathe.)

    The most basic ground rule is the Constitution, which a state has to accept before it's entered into the Union.

    And since you're located in the US, you are also bound by the basic rules and regs (aka laws) of the city, county, state, and federal governments.

    Since the 16th Amendment allows federal income taxes, you gotta pay.

    (Some states, though, don't have a state income tax. I know Florida and Nevada don't have state taxes, p'haps a /.r could fill in the blanks...?)

    "And they said onto the Lord.. How the hell did you do THAT?!"
  • by Anonymous Coward
    "My guess is that Bertelsmann, the world's third largest media company, has a little something to do with this."

    Huh??? You "guess" Bertelsmann has something to do with this, so it becomes a "Bertelsmann Tax" in the story's title? This is a new low, even by /.'s lousy standards.

    And no, if it turns out that Bertelsmann did have something to do with this (and they're not mentioned in the linked article), it doesn't justify the headline. Either substantiate the claim or drop it. Hiding behind a "guess" is just plain amateurish.

  • The US gov't does not, and never has, collected any "taxes" that are distributed to artists as royalties. Period, end of story.

    Makers of Music Minidisc, DAT Music Tapes, and Music CD-R discs for sale in the US do throw money into the music indrusty, but it's the same corporate channels that already existed for music royalties.
  • the split will be done according to some complex comparison of popularity that will actually get some money even to small publishers

    Yes, but which ones? If you assume there's a total fund available to go to publishers, then you either:

    • Calculate the total value of copyrighted works, and split it proportionately, with each publisher getting their share.
    • Split the fund proportionately among those publishers that you know about.

    The first method will leave a large surplus, as you'll never be able to find all the small publishers to give them their fair share, so who gets the extra? The second method relies on some agency collecting a list of publishers, which is never going to be accurate, and again will miss out the smaller publishers. Sure, you could do it on a "publishers must apply for their share" basis, but for small pbulishers, the administrative overhead will probably dilute the value of their share to nothing. The whole concept sucks. Let publishers go after copyright violators themselves. There's no need for governments to get involved at all.

  • You've hit the nail on the head. Levys on recording media have had a mixed success in various countries, but to my knowledge the question of how such a levy changes the rights of the purchaser has never been addressed. In the UK the BPI almost succeeded in getting a levy on blank tapes in 1981-2 but the amendment was thrown out when the BPI couldn't justify it beyond saying that any blank tape could potentially be used to illegally record music. Fortunately this didn't convince the Exchequer, which was about to reform the Copyright Act anyway. As this seems to extend to hardware, which is, after all a lot more expensive than a blank tape or CD, I suspect that it will only take someone like Compaq or Dell to refuse to pay the levy to make it unworkable.
  • ...if you're a government or big corporation trying to resist the flow of information on the Internet.

    jonkatz didn't mention it in his book review of The Sovereign Individual but one of the most telling quotes in there goes something like this: "Any government or corporation trying to fight the Internet will just accelerate their own demise." When I first read the book about three years ago, I had no idea what they meant. But now it's easy to see how this works: corporate/state pisses off consumers/taxpayers who just take their money elsewhere. Taxpayers can do this thanks to the Net, encryption and offshore funds, consumers will do the same. Any visible action against the Internet just focuses people - much like the MPAA has prompted the rise of software like LiViD.

    Germany imposes taxes on copying equipment, manufacturers go elsewhere, consumers buy imported models and then tell Bertelsmann where to shove their tax.

  • Gee, here's a novel idea: why not have a LIMITED GOVERNMENT, which would be unable to dole out corporate welfare like this under the guise of 'fairness'?

    This is what happens when the government starts controlling and directing all manner of economic activity. You end up with some companies and industries getting special treatment at the expense of others. Which companies get the favors is determined by who has the best lobbying presence, or who can pay the biggest bribe to elected officials.

    Greens, Socialists and others want to solve this problem by adding MORE government regulation of the economy. Instead of 'reforming' things, it just causes more corruption, more bribes, and more legislative 'favors' to go to those with an effective lobbying presence. Before long you have an monstrous, corrupt bureaucracy and a multi-tiered labyrinth of asinine rules, restrictions and regulations.

    Libertarians and laissez-faire types want to tie the hands of the politicians who would hand out corporate welfare and special favors, by limiting their power. I guess you could call this a 'supply-side' approach, because it cuts off the supply of corporate welfare money.

    --
  • The war of 1812 is hardly a defense of American freedoms, since they were the aggressors. The pretense was the continental policy, but since the main shipping states were actually against the war, it's clear enough they were looking for territory.

    America attacked, and got repelled. Then Britain attacked, but retreated after its navy was defeated. A peace treaty was signed, and then the battle of New Orleans happened.

    Great defense!
  • No matter what you say about these kind of tax policies, they are fairly common. What is even more sad is they arise out of a genuine concern and a desire to do what is right. If such a tax strategy were truly written with the interests of artists/writers at heart, wouldn't the money collected go more towards enriching these individuals? It should, but the intervening agents (read: featured villains MPAA/RIAA members) end up collecting these funds. The media companies realize they really don't need the artists because the public rely so much on them, they can elevate any schmuck to a superstar (aka the Johnny Bravo Syndrome).

    So while legislators are trying to protect the creators/originators of the work, the intervening corporations reap the rewards. IMHO, the only way to get the ball rolling in the correct direction is to have more artist types (writers, musicians, painters, etc.) run for political office. Look at the steps taken by Sonny Bono when he was in office?

    Unfortunately, these types of people are the last to want to get into the sewers of politics. Geekdom is similar in its dislike of the day to day issues of politics. So it looks like we need a few martyrs to take the bullet for the rest of us so we can avoid these kinds of taxing strategies.

    The government should never subsidize something that isn't vital to national survival. Media corporations are not vital to national survival, family farms, dairy farms, high tech research, and ocean exploration are (IMO). Time to get our priorities set.

  • by Kaa ( 21510 ) on Wednesday September 06, 2000 @05:39AM (#801713) Homepage
    f done correctly, this could actually help the publishing firms move their business in a new direction, by encouraging (financially) their participation in the New Economy.

    You mean the desire to survive is not enough? They have to be financially encouraged to do something for their own benefit??

    [shakes his head in disgust...]

    I say dinosaurs should go the way of dinosaurs. No need to set up a government system which will catch small furry mammals and feed them to the dinosaurs so that they be "encouraged" to adapt to life.

    Kaa
  • by jms ( 11418 ) on Wednesday September 06, 2000 @05:44AM (#801718)
    Levys on recording media have had a mixed success in various countries, but to my knowledge the question of how such a levy changes the rights of the purchaser has never been addressed.

    The question has been addressed by the U.S. Congress. When they passed the Audio Home Recording Act, in which the government collects mandatory royalties on all digital audio recorders and all blank digital audio media [cornell.edu], Congress gave all consumers the complete, absolute, unlimited right to copy any and all digital audio recordings, so long as the copying is for non-commercial purposes. Read it yourself. [cornell.edu]

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