Taxing iTunes Music and Other Intangibles

Tim Cook tries to avoid burdening anyone and is still treated like a criminal. Photo courtesy of Wikipedia.

Nathanael Arnold from Wall Street Cheat Sheet asks,

Although the First Sale doctrine in U.S. copyright law gives you the right to sell your physical media products after you “first” purchased them, the law currently does not extend that doctrine to digital media content, which is often merely licensed to the user. In this sense, why should a consumer pay a sales tax on a product he doesn’t fully own?

I find this question interesting because it is one of the rare instances when a Unitedstatesian asks a simple basic fundamental question about government. Unfortunately, he doesn’t take it very far, neglecting to ask,

What burden does the transmission of the data, licensed or owned, in a song, book, or other group of bits place on the government? If the government provides no service then why is it entitled to tax? If an architect emails plans for a building without being taxed then why are other transmissions of bits taxed?

Why are products of the brain taxed? Shouldn't a person own his brain's thoughts? Illustration courtesy of Wikipedia.

The federal government recently forced Tim Cook, CEO of Apple, to justify the taxes he pays even though he is a national hero not accused of breaking any laws. Cook confronts stiff competition from Google, Microsoft and Samsung and Nokia, the national heroes of South Korea and Finland. Apple formed a corporation in Ireland and is taxed at 2% because they don’t burden the Irish; the employees work in California. Apple doesn’t pay taxes to California because the burden of registering the corporation is borne by the Irish. If a corporation is a creature of state governments then why is the federal government allowed to tax corporations? Why don’t states enjoy the exclusive right to tax them?

Apple pays property taxes to the local government and the employees pay sales taxes when they spend their Apple salaries in the city. Apple is merely following government incentives and avoiding burdening anyone! Shouldn’t we all do the same? If we were all angels and never burdened the government then couldn’t we abolish government and live in peace?

The vast majority in the USA and Europe use government as a means of stealing from their fellow citizens, conducting civil war without bloodshed. Instead, government should provide services such as protection from foreign invaders. That’s the reason they can’t recover from the economic depression and fundamentally why you should move to Santiago, Chile.

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