Blood From a Computer?
A recent proposal from France President Nicolas Sarkozy is either crazy, crazy like a fox, or trying to distract attention from his recent PR issues. I’m not quite sure which category the proposal falls into, maybe all three. From the International Herald Tribune, “Sarkozy proposes taxing new technology to finance the old.” More specifically, the proposal is to ban commercials from public television in France and make up for the lost revenue by taxing the internet and mobile phones. The proposal is to place an “infinitesimal” tax on internet and mobile phone connections and directing that tax revenue to cultural industries.
In Sarkozy’s words it “…would allow public TV to quit trying to match the popular but mind-numbing game shows and reality television that now dominate the schedules of private broadcasters for what Sarkozy called “purely mercantile” reasons. Instead, public broadcasters could focus on quality documentary, educational, and fiction programming.” ((Time))
I’m not quite sure what to make of this proposal. On the surface it doesn’t seem right to place a tax on access to the flow of information, but on the other hand, if this would be a hindrance to that person talking on their cell phone in the restaurant…….
Less significantly, what would this tax be called? The IT (Internet Tax)? WT (Web Tax)? WWWT? HttpT? Communication Tax?
Isn’t this just a variant of the old Tobin tax, proposed by economist James Tobin some years ago? That was to be a tiny tax on financial transactions, but considering that money these days is usually just a form of data, there would not be much difference. In the early days of the public internet (i.e. mid-1990s), there was talk of a Tobin tax on data, I think.
The Tobin Tax seems to me an elegant proposal with huge practical downsides. As the Wikipedia article notes, it is hard to do in a single country, so some have proposed that the United Nations should do it. That kind of proposal brought out the anti-UN freaks in the US in amazing way – OTOH the UN is not at present known for its administrative efficiency, and if a tax is going to be acceptable, it has to be seen to (have some chance to) be administered fairly and economically.
The difference with President Sarkozy’s proposal is simply to say where the tax would be spent, and linking it to a different communications medium so it sounds related. But it isn’t, necessarily – most public expenditures are determined by their own merit in competition with competing expenditures, not just on the basis that there is a special source of income to pay for it. (I say “most” – special destinations for some kinds of public income are becoming more common in the past 15 years or so, but the policy folks in Finance departments tend to resist them because they distort priority-setting.)
Tiny taxes have a habit of becoming less tiny over time, too – once you have the principle established and the administration set up, changing the rates is very tempting, and the number of demands on public funds is apparently infinite.