Pay a tax on every gigabyte you download? Haha, that's too funny. But not to Hungarians Hungary is threatening to tax its broadband providers for every gigabyte their subscribers use. The Fidesz-run European nation said that it would charge ISPs 150 forints (around 60 US cents or 39p in the UK) for each gig transferred. Hungary shifted 1,150PB in 2013, and 18PB in mobile data, according to figures from …
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Could you imagine the government pulling this in the UK?Could you imagine the government pulling this in the UK?
Wanting to pull it - yes.
Pulling it - not a chance. The IT system delivered by Cap Gemini to customs and excise to do this will go belly up taking the country internet with it. Same as with any UK govt IT project.
"Could you imagine the government pulling this in the UK?"
They do - albeit at a much lower rate. Many of us have broadband subscriptions related to max usage. Mine is 200Gb. I would pay less for a lower limit and more for a higher limit. And we pay 20% vat on that.
Before you say your ISP offers unlimited - it usually ain't if you want to use it full throttle.
Secondly if the cost becomes as significant as the Hungarians propose - a few things would happen:
+ Switching to proxy servers that compress the code
+ Turning off pix
+ Electing to use the mobile (lighter) version of the website by changing user agent
+ Bringing the cloud home to a NAS
... and so on. In other words about as effective as the old (pre-MS) Windows Tax. Their computing would be so last millennium. How this is going to help the Hungarian economy I don't know. Now if they could sniff and just tax cat code - that would be different ;-)
"Before you say your ISP offers unlimited - it usually ain't if you want to use it full throttle."
Happily pound mine at the gige up/down I pay for - the issue isn't governments it's customers who accept bad service and/or live in the middle of nowhere. Generally the issue is services from *really bad* private ISPs some of which the government throws money at and nobody knows where it goes (anywhere but on providing better services - yacht funds/index-linked pensions I guess) (company will remain nameless because we all know full-well who it is).
Just curious. IANAL...
Wouldn't a tax that charges people for expressing themselves or associating with others (and thereby potentially hinder such association or speech as well as limit it to wealthier segments of society) go against the ECHR?
I'm thinking of articles 9,10 and 11 in particular.
"Except that taxes don't stop you from working"
Indeed, they make you work harder and longer, as you sweat and toil for the government's largesse (redistribution to those not in need for a small fee and mucho promises) till about Mai or June. Only after that is the income you gain truly yours.
You don't pay VAT on phone calls. You pay VAT on top of the price that you pay for goods and services, whatever those goods and services are. If you want an 'analogy', this is like excise duty on tobacco and alcohol in that the government want a given amount from the suppliers for the quantity supplied, in addition to the normal tax on business profits. Government sees that people do things and sees that they will probably keep doing things and increase their consumption - government says "we can squeeze money out of that, let's go!".
A Land Value Tax is the only economically efficient tax because it encourages more efficient use of land and can prevent speculators buying up land in the hope someone will build infrastructure near it. It's hard to evade because land is easy to track, and the tax take is closely related to the GDP so government "investment" and benefits should rise along with the nation's wealth. That's fine in a mostly agrarian economy where economic value is derived from the land (Adam Smith was a fan) but when value is created in cyberspace it would put a disproportionate burden on farmers relative to Amazon and the like. Taxing each gigabyte is a bit like taxing each acre, so this is something of a Land Tax for the modern age.
Taxing each gigabyte is a bit like taxing each acre, so this is something of a Land Tax for the modern age.
Err.... In what kind of universe is "land" and "number of bits transmitted" in any way comparable?
The only effect will be to depress the number of bits transmitted (adios dreams of a 'digital economy') and suck wealth from the private economy into crony areas. A win situation only for socialists and other leeches.
Well, I guess Blockbuster will survive in Hungary, then.
"That's fine in a mostly agrarian economy where economic value is derived from the land"
Not really - land used for agriculture tends to be ridiculously cheap compared to land zoned for residential or commercial properties. LVT would be a fairly minor charge on farmers, and a massive charge on London housing.
To give an idea of the scales (although the figures may be slightly out of date), farm and forestry land makes up about 80% of the UK by area, and has a total rental value of approximately £1.7bn. Residential on the other hand makes up 3.5% of the UK by area and has a total rental value of ~£200bn (commercial is 0.4% and ~£30bn).
LVT would not charge a flat fee per acre, it would instead charge a proportion of the rental value of the land - meaning that farmers pay next to nothing.
I like your idea! You could also surround Hungary with a forest of Wifi Antenna's & sell access to the poor impoverished Hungarians. That way you don't have to run in the fibre, which the H-Govt could "accidentally" dig up with their tanks^H^H^H^Hractors.
EU rules forbid anti-competitive behaviour no? Hungarian ISP's go belly up, H-Govt looses what little Corporation tax the ISP's deigned to pay
Win win really :)
"You could also surround Hungary with a forest of Wifi Antenna's & sell access to the poor impoverished Hungarians"
Or sell LEO satellite broadband....
http://spectrum.ieee.org/tech-talk/aerospace/satellites/google-aims-for-billion-dollar-satellite-fleet-to-spread-internet-access
This stuff doesn't just work where landlines are difficult to find.
Come to the United Kingdom. Haven't you heard? The government here will simply give you a house, money, education and healthcare. See the Daily Mail, the Sun and the Express for more details. If you come to live in London, then rest assured the streets are paved with gold.
Would mesh systems that share local resources count as "Tax dodging"?
I guess it would open up the market for "Cloud" compression services, where everything you download is compressed to the hilt.
Why do they stop here, how about taxing each minute that they watch television, or rather, are "tuned in"?..
The only way I could see this working is if ISPs switch to selling fixed lines with a set data allowance. The rates charged in the story would cost me like £235 a month, that's crazy.
And will the government be tax exempt, I am sure that they use a lot of data!
Taxing air!!! Fuck Yeah!
And Hungary is a member of the EU since 2004, so Hungarians already pay VAT for their Internet connections. This new tax would cause Hungary to collect -paradoxically- far less taxes.
Another case of harebrained politicians repeatedly shooting themselves in the foot.
Money for government services has to be raised somehow. Complaining merely because it is on something we use a lot of is no better than the special pleading of other groups on whom taxes fall.
The questions of taxes are if they are fair, efficient to collect, don't distort the economy in unwelcome ways, and don't conflict with broader policy priorities. At the moment a tax on Internet traffic would be progressive (the rich paying more than the poor) and efficient to collect (easily measured, identifiable parties to request payment from).
You could argue that the effect on economic activity isn't going to be great. The "tax" of overpriced mobile telecommunications hasn't stopped people using mobile phones. Demand for telecommunications seems very inelastic to price.
I am opposed to this because of the conflict with the policy priorities of government. Increasing the price of telecommunications inhibits greater use of telecommunications; telecommunications at high speeds are a substitute for travel; and reducing the use of internal combustion engines is a national priority to avoid climate change catastrophe.
Almost all governments seeking increased funding could, for the next 10 to 20 years, do that through a carbon tax. That would kill two birds: advantage government policy in an important area, and raise revenue.
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