back to article Fun fact: US Customs slaps eyeglass taxes on optical networking gear

An American telecoms hardware shifter is fed up with US Customs officials slapping extra tariffs on its fiber-optic tech imports – all because the agents are classifying the IT gear as eyeglasses. ADC Telecommunications, which is part of North-Carolina-based CommScope, has urged a US federal appeals court to issue a summary …

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Happy

Education, education, education or what was it.

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Re: He made one mistake

Officials scared of Trump will do anything to prevent imports from Mexico.

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Tax on Glasses?

Is that why medical things are so expensive in the USA. They even put extra taxes on medical eye glasses??

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This post has been deleted by its author

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Re: Tax on Glasses?

To be fair, the obscene prices for eyewear are not due to taxes, they're the result of almost the entire eyeglass market being controlled by the Luxottica monopoly.

The fanciest frames at LensCrafters often sell for $400-500. Holding those little assemblages of glass, metal, and plastic that cost $25-50 to make in your hand, you might wonder how exactly you were roped into paying so much.

The answer is basic economics. Most frames are manufactured by a single company, named Luxottica.

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Re: Tax on Glasses?

"The answer is basic economics. Most frames are manufactured by a single company, named Luxottica."

Which not relevant to this discussion, as they only make the frames, not the lenses, so they would not be applied this duty.

Plus, Luxottica generally produces about 10% of the frames sold. I don't know how Forbest get off calling that a monopolgy. They control 80% of the "brands", but do brands matter? I guess if you are slave to marketing, and you want something branded, you have to buy a Luxottica product. It is weird that brand control is called a monopoly, when the entire concept of a brand is consumer hostile. The simplest definition of a a brand, is a "perception of value". Not actual value, just a perception of value. So are DKNY frames over priced? Yes. But all DKNY branded products from underwear to jeans are overpriced, because DKNY is a designer brand.

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Re: Tax on Glasses?

newsflash: DKNY is a Luxottica brand/product and their revenue ends up reported on Luxottica's balance sheet at the end of the fiscal year - so, yes it matters to shareholders and tax authorities.

http://www.luxottica.com/en/eyewear-brands/dkny

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Anonymous Coward

Re: Tax on Glasses?

Well, when I worked on an ex-pat assignemt in the US for 3 years I discovered glasses were exceptional value as they were covered on my company health insurance policy unlike back in the UK where I'll probably be spending a few £100 on new glasses in a couple of months (I need high dioptre varifocals which jacks price up a lot)

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Anonymous Coward

The "luxury good" sector has seen a lot of consolidation

A few holding companies now own most high-end brands, and they do because they can ask premium prices on whatever they sell, just like Apple.

Luxottica scooped up many brand US companies US investors were no longer interested to sustain - blinded by the financial sector easy money without all those pesky details and issues of manufacturing.

There are women bags well beyond $10K, does anybody believe there's enough material and manufacturing cost to justify that? I'm sure many people at Forbes, and their readers, are used to pay premium prices for goods that show their social status.

Many people are willingly to pay a lot to show off, and especially show they're affluent (or pretend they are), and other exploit them for money - and lately we also have "influencers" to fuel the business.

I think will need to develop a vaccine against "influencers"...

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Re: Tax on Glasses?

I used to work in one of Luxottica's retail stores one upon a time, and they do indeed make a very large number of lenses. They've also sold products made with lenses by Zeiss and Essilor (who they just merged with), but even before that there were plenty of house branded lenses being cut on-site.

It's not just LensCrafters either, they own Pearle Vision too, as well as their own vision benefits company, EyeMed Vision Care, and ridiculous number of retail outlets.

Sunglass Hut International | Apex by Sunglass Hut | Sears Optical | Target Optical

OPSM | ILORI | Optical Shop of Aspen | Laubman & Pank | GMO | Oliver Peoples

Alain Mikli | Oakley | David Clulow | Glasses.com | Econópticas | Salmoiraghi e Viganò

...and there's easily around 30 different designer brands that they either own, or manufacture frames for. Luxottica is not only the largest optical retailer in the United States, with 7.3% of US retail sales in 2015--but as of 2014, it is the second largest vision benefits company in the United States.

They're absolutely massive and they throw their weight around all the time. When they got into a dispute with Oakley, Luxottica simply dropped their frames from all their stores, and when Oakley stock tanked--Luxottica bought them up for next to nothing. Their largest competitor is Safilo, and they're only worth about a third of what Luxottica is--so it's not even close.

They are about as monopolistic as a company can get without getting sanctioned by the government.

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Anonymous Coward

Re: Tax on Glasses?

Am I missing something...how can a 7.3% market share be a monopoly?

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Call it high-throughput fiber

Import it as a food product.

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Re: Call it high-throughput fiber

Oh christ, no. There are even worse controls on food products. They wouldn't let me bring in a malt loaf, even though it was Soreen. (Though scabrous and diseased animals and meat product appear to have little trouble entering the country, perhaps because they increase the quality of what is already here)

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Anonymous Coward

Re: Call it high-throughput fiber

"Oh christ, no. There are even worse controls on food products. They wouldn't let me bring in a malt loaf, even though it was Soreen. (Though scabrous and diseased animals and meat product appear to have little trouble entering the country, perhaps because they increase the quality of what is already here)"

Malt loaf contains live culture, so its a no-no. As far as meat, next time try to bring some meat products into the US, and see how Custom's responds. You will never think of doing that again, let alone posting something so silly. For extra fun, make sure to not list the meat product on your custom's declaration form.

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Facepalm

Re: Call it high-throughput fiber

Just call it electromagnetic radiation instead of light...

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Mushroom

Re: Call it high-throughput fiber

"Just call it electromagnetic radiation"

If you use the word 'radiation' then they'll probably just assume you're a terrorist trying to smuggle a nuke.

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Re: Call it high-throughput fiber

>Malt loaf contains live culture, so its a no-no.

Err if it contains live culture then either it hasn't been cooked properly or has gone well past it's consume by date.

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Re: Call it high-throughput fiber

RE AC "You will never think of doing that again, let alone posting something so silly. For extra fun, make sure to not list the meat product on your custom's declaration form"

I admit to silliness, it's my core subject. But the rules that apply to random entries into the country are always the strictest and carry the harshest penalties. When it comes to big companies with large amounts of money wanting to bring stuff into the country, well, that's another thing entirely. My meaty comment was aimed primarily at companies based in the states that have slaughter houses down in Mexico who send their wares homeward. I, and other random visitors, cannot afford the fees required to bring meaty malfeasance into the country. Big companies can. It's a question of scale. My poor old malt loaf pales into insignificance; god rest it's fruity heart.

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Famous quote

An intimate friend of Faraday once described to me how, when Faraday was endeavouring to explain to Gladstone and several others an important new discovery in science Gladstone's only commentary was 'but, after all, what use is it?" 'Why, sir,' replied Faraday, 'there is every probability that you will soon be able to tax it!'"

W.E.H. Lecky

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Facepalm

there are none so blind as those who will not see

Why am I not surprised?

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Re: there are none so blind as those who will not see

Apt post of the year.

Not enough upvotes.

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G2

expensive internet service

that's an additional explanation why US internet providers are crap at deploying fiber internet access - the import fees for optical fiber equipment and access routers for millions of customers must be horrendous.

In addition, each separate SFP module will have a separate fee applied since it's technically a distinct device, usually shipped and purchased in separate packages too.

yes for each SFP module.

https://en.wikipedia.org/wiki/Small_form-factor_pluggable_transceiver

This can lead to having to pay multiple times the same fee for a single equipment that has multiple optical interfaces, one fee for each optical interface. That's crazy.

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Anonymous Coward

Re: expensive internet service

"that's an additional explanation why US internet providers are crap at deploying fiber internet access - the import fees for optical fiber equipment and access routers for millions of customers must be horrendous."

SFPs come from China generally, not Mexico. And either the duty doesn't apply to transceivers, as they are largely electronic (they don't have a proper lens), or they don't apply on imports from China, because I've never seen US Customs apply duties to transceivers. The price of generic SFPs in the US are among the cheapest in the world. I bet you couldn't get generic SPFs as cheap in the UK, as you do in the US, but the UK starts with liability there because of VAT.

US Internet is crap because most of the last mile isn't optical, making taxes on optics meaningless.

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Re: expensive internet service

"I bet you couldn't get generic SPFs as cheap in the UK, as you do in the US, but the UK starts with liability there because of VAT."

Fiberstore has a warehouse in Germany, so I'll take that bet.

In the USA you should be paying your local taxes so let's work on pre-tax pricing.

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Anonymous Coward

Customs are making a spectacle of themselves here. I think when they win they should celebrate and raise their glasses.

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Meh

Well, their logic is sound...

You use glasses to see things - tax it.

You use internet to see internet - tax it.

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Simple solution

Don't call it 'optical' but something like 'ultra short microwave'.

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Re: Simple solution

You expect them to know the difference between microwaves and microwave ovens?

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Anonymous Coward

Obviously the customs have decided to tax this item and then invented an excuse to do so.

They know what 'network equipment' is, it's not about that, it's about money and keeping competition out.

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"customs have decided to tax this item"

Umm, no. That would be our illustrious congresspersons. Start by looking for one with a brother-in-law in the spectacle business.

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Didn't they get the memo? Start producing all the products in the USA.

SIMPLES

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Thumb Up

We used to make networking gear here, but all the companies decided they could make more money by outsourcing to China. Then China started making networking gear, and the US companies couldn't compete, and that's why we need to import it now.

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Dealing with red tape

It'll take years to get that change made, if they can get it done at all.

Why not change the description of the product on the customs forms from "fiber optic" to "fiber"? Or "fiber PHY" or "fiber GBIC" etc. Customs is obviously doing a text search on the forms, so do a search/replace on the 'offending' text!

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Not just US Customs

Many years ago, when I lived in the UK, I had a small sideline importing hand-painted silk fans from Thailand. UK Customs & Excise classified them under the heading "Fans, Vacuum Pumps and Air Compressors".

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Joke

Re: Not just US Customs

"Fans, Vacuum Pumps and Air Compressors".

Well, what's wrong with that? Fans move air about whether they are hand held, mechanical or electrical, don't they?

OK. I take your point, but you know Customs agents are devoid of common sense or imagination. Though they do seem to have had a sense of humour.

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Re: Not just US Customs

Trouble was, they insisted on me specifying their power output. I told them it depended on how fast you flapped them. I think in the end they decided to re-classify therm as "ladies accessories"

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WTF?

The UK hardly has clean hands ...

HMRC vs. McVities springs to mind ....

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Re: The UK hardly has clean hands ...

That as an argument about whether they were cakes or biscuits. I did notice that they were a good deal softer afterwards. NOM NOM NOM I can't just eat one.

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Medical Costs

Well obviously US health care is so expensive as GTN (Glyceril TriNitrate) tablets are being charged for and handled under the High Explosive regime, rather than the medical goods. Explosive heart attacks all round.

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Coat

They still raise an eyebrow ...

... over my AK-47 'tractor parts'.

I'll be off now. Van just pulled up ....

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Photoshop cloud

"The optical signals acted upon by these products are never visible, and therefore the subject merchandise is never used to create or enhance visible images."

But with things like photoshop moving to being cloud based, you could argue that all networking gear is used to enhance visible images...

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