A Tax for All Seasons

A brief editorial in the LA Times suggests taxing intellectual property as a solution to protecting valuable intellectual property while allowing less valuable property to fall into the public domain. The concept is simple: create a cost for maintaining copyrights so that non-revenue generating copyrighted material falls into the public domain.

At first glance, this seems like a great idea. Disney gets to keep Mickey Mouse under copyright in perpetuity by paying a tax while something like an ancient Atari game is released into the public domain to avoid paying the tax. The trouble is such a tax benefits corporations even more than current copyright law.

An IP tax would require an immediate assignment of value to copyrighted work, work like say, this blog. With several hundred pages, this blog would immediately become a huge tax liability, or immediately be released into the public domain. Either way, it creates a disincentive to write a blog entry knowing that the blog entry immediate begins accruing costs or that it can be copied freely elsewhere.

Corporations on the other hand, have vast reserves of cash. Early Nintendo games-- those pixelated 16 bit classics-- would seem a perfect candidate being released into the public domain if there was an IP tax. Yet, Nintendo has released older games on new systems for nostalgia seekers, a "value added" model to help sell new consoles. They have also vigorously defended their existing property rights shutting down emulation software sites and flash game remakes. All that defense of two decades old games would seem to indicate an IP tax would not immediately send material like old Nintendo games into the public domain.

The internet has already democratized intellectual property. Newspapers are now competing with blogs. Publishing houses are competing with digital downloads. Record labels are competing with MySpace Bands, and Hollywood competes with YouTube. These nascent technologies may not yet offer the same quality as newspapers, publishing houses, record labels and Hollywood studios, but eventually, as these distribution channels and contributers mature, the line between amateur and professional will evaporate. An IP tax however, may price out amateurs before demolishing the old standard bearers of intellectual property.

There should be little debate as to whether or not copyrights, patents and trademark laws are amended. The real debate now should focus on how to change intellectual property protections; an IP tax will not encourage creativity and will only benefit the corporate domination and manipulation of intellectual property.