Petter Reinholdtsen

Why isn't the value of copyright taxed?
17th November 2012

While working on a Norwegian translation of the Free Culture by Lawrence Lessig (76% done), which cover the problems with todays copyright law and how it stifles creativity, one idea occurred to me. The idea is to get the tax office to help make more works enter the public domain and also help make it easier to clear rights for using copyrighted works.

I mentioned this idea briefly during Yesterdays presentation by John Perry Barlow, and concluded that it was best to put it in writing for a wider audience. The idea is not really based on the argument that copyrighted works are "intellectual property", as the core requirement is that copyrighted work have value for the copyright holder and the tax office like to collect their share from any value controlled by the citizens in a country. I'm sharing the idea here to let others consider it and perhaps shoot it down with a fresh set of arguments.

Most valuables are taxed by the government. At least here in Norway, the amount of money you have, the value of our land property, the value of your house, the value of your car, the value of our stocks and other valuables are all added together. If the tax value of these values exceed your debt, you have to pay the tax office some taxes for these values. And copyrighted work have value. It have value for the rights holder, who can earn money selling access to the work. But it is not included in the tax calculations? Why not?

If the government want to tax copyrighted works, it would want to maintain a database of all the copyrighted works and who are the rights holders for a given works, to be able to associate the works value to the right citizen or company for tax purposes. If such database exist, it will become a lot easier to find out who to talk to for clearing permissions to use a copyrighted work, which is a very hard operation with todays copyright law. To ensure that copyright holders keep the database up-to-date, it would have to become a requirement to be able to collect money for granting access to copyrighted works that the work is listed in the database with the correct right holder.

If copyright causes copyright holders to have to pay more taxes, they will have a small incentive to "disown" their copyright, and let the work enter the public domain. For works with several right holders one of the right holders could state (and get it registered in the database) that she do not need to be consulted when clearing rights to use the work in question and thus will not get any income from that work. Stating this would have to be impossible to revert and stop the tax office from adding the value of that work to the given citizens tax calculation. I assume the copyright law would stay the same, allowing creators to pick a license of their choosing, and also allowing them to put their work directly in the public domain. The existence of such database will make it even easier to clear rights, and if the right holders listed in the database is taxed, this system would increase the amount of works that enter the public domain.

The effect would be that the tax office help to make it easier to get rights to use the works that have not yet entered the public domain and help to get more work into the public domain and .

Why have such taxing not happened yet? I am sure the tax office would like to tax copyrighted work values if they could.

Tags: english, freeculture, opphavsrett.

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