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September 29, 2004
A Tax on Innovators
Fred von Lohmann has yet another cogent, compelling post on the misguided Induce Act, this time explaining why the ACU (PDF) and the National Taxpayer's Union are not fans:
[Let's] call [the Induce Act] what it is: a tax on innovation. Technology companies would find themselves under constant pressure from entertainment industry lawyers waving their newly-minted "inducement" law. This means many great products would be hobbled, and many others would never be built. Less flexible, less useful products means fewer sales, lower revenues. That's a tax on our nation's technology companies, a damper on earnings, a drag on competitiveness.
And all for nothing - this tax won't magically solve the file-sharing dilemma, nor will it put a nickel into the pockets of artists.
That's why the Amercian Conservative Union and National Taxpayer's Union have both joined the long list of public interest and technology industry groups opposing the Induce Act.
I'm a copyright lawyer. I believe in copyright. But copyright has never given an oligopoly of media companies a veto over new technologies.
On that note, EFF today joined forces with Downhill Battle for a new anti-Induce initiative
. If you want to make an impact on the debate happening this week in the Senate, do check it out
Later: Also via Fred, a few numbers to put the RIAA's push for the Induce Act in perspective:
IBM 2002 operating revenues (from annual report) = $81b
Verizon 2002 operating revenues (from annual report) = $67b
Total 2002 annual revenues of motion picture and video industries
(from CBO Report) = $62b
Total 2002 annual revenues of music industry (from CBO Report) = $13b
So IBM's annual revenues are larger than the entire music and motion picture industry ***combined***.
Verizon's revenues alone beat the movie biz.
In addition, Intel's annual revenues are ~$30b (more than 2x the entire music industry).
Q: What gives the movie and music industries the leverage to demand legislation that will levy an innovation "tax" on the technology industry when the tech sector is contributing so much to the economy?
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