Re:Spanish authorities raid Google offices over tax
by AnthonyMouse on Friday July 01, 2016 @10:17AM
(#12016181)
Charging for infrastructure is a bad idea. You pay the cost of building the infrastructure whether you use it or not and the cost of the marginal car or the marginal data packet is near-zero.
The whole problem with taxes is that you want tax revenue but you don't actually want to tax anything because taxing things causes people to avoid doing them. That's why everybody wants corporate income tax -- who cares if we discourage "corporate profits"? The problem is what you really end up doing is discouraging corporate profits in your country, so the profits end up somewhere else instead.
The best possible tax seems to be to impose VAT on everything, so that the rate stays low because there is a broad tax base and you're not discouraging anything in particular very much.
Fees for infrastructure are the opposite of that. A 20% VAT makes the thing 20% more expensive, which isn't that bad. An infrastructure fee for what would otherwise have been zero cost makes the thing infinity percent more expensive. It's basically the worst case scenario.
So for example a high tax on network usage is basically going to kill YouTube (and every other streaming video service) because the amount of bandwidth it uses for the amount of revenue it generates would no longer be worth it. Then your total network usage has been cut by 80% which means you need to quintuple the fee to make the amount of revenue you were expecting and it quickly snowballs from there.
The whole problem with taxes is that you want tax revenue but you don't actually want to tax anything because taxing things causes people to avoid doing them. That's why everybody wants corporate income tax -- who cares if we discourage "corporate profits"? The problem is what you really end up doing is discouraging corporate profits in your country, so the profits end up somewhere else instead.
The best possible tax seems to be to impose VAT on everything, so that the rate stays low because there is a broad tax base and you're not discouraging anything in particular very much.
Fees for infrastructure are the opposite of that. A 20% VAT makes the thing 20% more expensive, which isn't that bad. An infrastructure fee for what would otherwise have been zero cost makes the thing infinity percent more expensive. It's basically the worst case scenario.
So for example a high tax on network usage is basically going to kill YouTube (and every other streaming video service) because the amount of bandwidth it uses for the amount of revenue it generates would no longer be worth it. Then your total network usage has been cut by 80% which means you need to quintuple the fee to make the amount of revenue you were expecting and it quickly snowballs from there.