February 27th, 2008 by Edward Miller

Slashdot linked to an outstanding article in the LA Times about the need for a new type of property tax, an Intellectual Property Tax. Such a tax would discourage people from holding on to intellectual property from which they are deriving no income.

All works for which taxes are not paid would revert to the public domain, which means the author would still be entitled to attribution, but beyond that anyone is free to use the work as they please. Since intellectual property is such a huge roadblock to innovation, we should be thinking outside the box.

Of course, works licensed under the GPL would have to be considered tax-exempt. To keep it simple, at first it could just be a flat tax that gradually increases over time. It wouldn’t have to be very high at all to boost innovation immensely.

I’m not sure how feasible this would be in all circumstances. It would certainly be easy to implement for patents, but it would be way more complex to tax copyrights. In any event, we need to be thinking outside the box more, and this is a great example of that.


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3 Responses to “Intellectual Property Tax”

  1. […] revenues from Intellectual Property must pay a fee to register with the government, and then must pay a flat tax upon all revenue from […]

  2. I’d prefer to see patents and copyrights treated as the public goods they are and paid for appropriately. This could be done via some sort of state-sponsored x-prize in the case of patents or something more libertarian such as assurance contracts and micro-benefactoring both of which the internet make much more possible than in the past.

    If we are to retain IP, I’d propose the following:

    For copyrights, no more automatic copyright. If you want to copyright something you register it. If creation info isn’t public than no argument can be made that piracy harms the creator since people wouldn’t know who to send the check to anyways. Registration costs something nominal like $1. Every year one must re-register and the price doubles. Only things that were REALLY worth it could be retained. Another option is to go to some short hard-lined number of years like 14.

    For patents, control of the patent and incentive to develop should be separated as much as possible. Let’s say patents get a hard-line number of years where they’re valid, something like 10 years. If someone patents something, then others bid to use it. Everyone matching the highest bid has a right to produce and use it. The creator has no power to turn down the highest offer. This eliminates roadblock and submarine patents. A portion of the payment should go to the patent holder, but the bulk to either a citizen’s dividend or into the treasury.

    I’m against IP in general since I believe that society needs truth to function, it doesn’t need patents or copyrights. However, the U.S. can certainly do a lot better than it is currently as regards IP.

  3. As you can see from the post, I do very much like the idea of IP fees that increase over time. I had also thought of using a doubling as the standard, starting at 1 dollar, so your thoughts are very close to mine.

    Your idea of funding a citizen’s dividend this way makes sense too, as it is a tax on privilege, though it would only work in a post-LVT society. (Something I wasn’t really aware of when I wrote this post)

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