Tax nerdery
It's been very neatly summarised by Dan Neidle, a tax partner at Clifford Chance:
"1. Taxes with high thresholds are a bad idea - they distort behaviour at the point of the threshold.
2. Sector/activity taxes are a bad idea - they draw an arbitrary line at which the tax applies, and invite uncertainty, disputes and avoidance around that line.
3. Turnover taxes are a bad idea - they over-tax new entrants and under-tax well-established players (and so under-tax economic rent)
The particular genius of the EU and UK digital services taxes is that they are sector-based turnover taxes with a high threshold."
Dan also makes the very pertinent point that most of these taxes are only going to work if you're able to track users to a fair degree of granularity, otherwise you can't deal with issues like multiple devices, travelling cross-borders etc. However, there have been some recent rules about that sort of thing, suggesting that either governments have done the assessment and decided their taxes are more important than your privacy, or they haven't thought about it yet.
Biting the hand that feeds IT
