

France weighs 'culture tax' - k-mcgrady
http://in.reuters.com/article/2013/05/13/france-culture-tax-apple-google-idINDEE94C0AQ20130513

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crazygringo
Title appears inaccurate, according to the article itself:

> on technology giants like Apple and Google

> taxes on sales of smart-phones and tablets

> The proposed tax would mirror fees already paid by television users, TV and
> radio broadcasters and Internet service providers

So it's nothing specific towards Apple or Google, or "anti-American", as far
as I can tell from the article. It's just a device tax. So, seems a bit
sensationalist.

~~~
ekianjo
The government is desperately out of cash, they will be looking for new taxes
everywhere possible (instead of cutting their expenses, as usual), especially
on what's popular. It's a wonder they have not touched at Smartphones and
similar devices yet.

~~~
carlob
Maybe the French government is out of money, and they might be even desperate,
but first of all this money will be earmarked for the production of
independent movies and the like. Secondly and more importantly when the French
elected a socialist president they where expecting more actions like this one
and many commentators think the government is not doing enough and is still
too enterprise-friendly.

~~~
ekianjo
Well they can earmark it where they like, it does not change the fact the
country's first budget (even before Education) is dedicated to debt repayment.
And things will only get worse as the confidence in the Eurozone erodes,
sending future debt rates to the roof. They won't be solving much by raising
taxes, and at one point raising taxes will definitely have a negative effect
(i.e. significantly hurt consumption and therefore reduce the government
revenues - we may already be at that point).

~~~
loup-vaillant
On the other hand, cutting expenses (as you seemed to be suggesting in another
comment) is not the solution either. Remember _how_ we got in this mess in the
first place:

(1) Stop creating money directly, but borrow from private parties instead.
_They_ will effectively create the money –fractional reserve banking and such.

(2) Keep a slight deficit on your budget every year.

If I recall correctly, the current French debt is 80% interests fees. If we
had borrowed from our central bank instead of Rothschild&co, our current debt
would have been only 20% of what it is now –well, assuming we didn't borrow
even more.

So, now, mainstream politics is all about the raise taxes / cut expenses false
dichotomy. Our governance doesn't seem to see the obvious third alternative:
stop borrowing from the market, start borrowing from the central banks at
nearly 0% instead. (It can be done indirectly, despite the current EU
constitution/setting: let some public agency borrow from the central bank,
then let the states borrow from this agency. Of course, it requires some
impossible coordination from all states)

~~~
TheAnimus
>On the other hand, cutting expenses (as you seemed to be suggesting in
another comment) is not the solution either. Remember how we got in this mess
in the first place:

Depends what you mean by 'this mess' if this mess is a high level of debt
without the productive economic activities to service it, I'd suggest that it
was by spending too much on things that didn't provide a return on investment.

>They will effectively create the money –fractional reserve banking and such.

No, that is not fractional reserve banking, in fact what would happen if they
did just print more money? Lets pretend they could do it without breaking away
from the euro. Inflation would rise sharply? Would that lead to a better
economic situation? Some people say it does, hence the UKs policy on QE.

>If we had borrowed from our central bank instead of Rothschild&co, our
current debt would have been only 20% of what it is now –well, assuming we
didn't borrow even more.

That is just a gross oversimplification, and really Rothschild&co? What are
we, angry I learnt economics from youtube socialists?

>start borrowing from the central banks at nearly 0% instead.

Historically, this action hasn't worked well. Ultimately they have debt
obligations as is, they need to settle that with something, where would that
something come from? They could deflate the debt, which would be the effect of
creating a synthetic entity which would loan at 0%. To deflate this much debt
would seriously hurt people. They could potentially try and bond default,
Russia kinda got away with it (some people say it was a good idea), but then
Argentina really showed the problems that can happen doing this.

This is why people come down to taxation and spending, ultimately they are the
only options, because any kind of inflationary policy is a cruel tax, as it is
often felt more by the poorest, due to the commodities which tend to rise.
Meanwhile the super rich can make money of the back of it and even increase
their worth leveraged thanks to the inflation bonds and the like.

~~~
loup-vaillant
On inflation (I don't want to duplicate comments):
<https://news.ycombinator.com/item?id=5706941>

On Rothschild&co: I'm quite serious: President Pompidou used to work for them,
prior to the 73 law that forbade the state from borrowing to the central bank
(there were no Euro, back then). The only alternative was to borrow from
private banks, _of course_. and Rothschild conveniently happened to be one of
the big players, and happened to finance a significant part of the French
debt.

Well, as far as I know. My sources are mainly Pierre Larouturrou, and Étiène
Chouard, left-sided French economists.

On deflating the debt: I doubt the solution would be to do it _at once_. On
the other hand, why not keep the budget as it is, and just stop borrowing from
the market altogether? It would _progressively_ Lower the payments on the
interests, freeing some budget to actually lower the debt, or doing some other
investments. I did not however measured the impact of not borrowing from rich
people any more.

------
mmanfrin

      French officials are also pushing to ensure that French cultural products, and notably the audiovisual sector, remain exempt from free trade rules during talks on a planned trade agreement between the European Union and the United States.
    

I.e., tax American/Foreign products only. I.e. a tariff. I.e. illegal under
the WTO.

~~~
ekianjo
Well, it's not like we manufacture anything in France anymore :)

~~~
lotsofcows
While manufacturing's been on a downwards trend during the recession, almost
20% of France's GDP comes from manufacturing - greater than USA or UK -
similar to Germany and Japan.

~~~
ekianjo
Maybe, but what kind of manufacturing are we talking about, and how much is
really privately-owned and not state-owned or state-subsidized? That is the
real question to determine if it is comparable with US or Japan for that
matter.

------
k-mcgrady
If this passed the companies they tax would just pass it on to the consumer.
e.g. Apple products are regularly claimed to be much more expensive in the UK
but it's mainly due to VAT.

~~~
digz
Yep. Which will marginally decrease the purchase of smartphones, which will
marginally decrease the revenue to the french telecoms, which would force jobs
to be lost, but <sarcasm>thankfully</sarcasm>, french companies aren't really
allowed to fire people.

This is a classic deadweight loss.
<http://en.wikipedia.org/wiki/Deadweight_loss>

~~~
outside1234
> french companies aren't really allowed to fire people.

which means each person gets paid proportionate less, so essentially the
French pay for this in lower wages.

~~~
ekianjo
Yeah, but there is also a limit for the minimum wage, so the flexibility in
terms of salary is... narrow.

------
bane
France is weird. Much of the world embraced French culture, then added local
flavor and developed all kinds of great stuff. Now it's time for France to do
the same. When France cooperates a little, awesome fun and exciting things
come from it.

<http://en.wikipedia.org/wiki/The_fifth_element>

~~~
ekianjo
what do you mean by "Much of the world embraced French culture" ? What parts
of the culture are you referring to ? Certainly not politics...

~~~
pliny
>certainly not politics

Right, Liberalism and Republicanism never really caught on following the
French revolution.

~~~
ekianjo
Well, no other country did a "revolution" and had their rulers decapitated
(women included) following the French Revolution. Strange huh ? And the French
Revolution was an utter failure within a couple of years, in case you had not
noticed.

~~~
pliny
How is that relevant? Liberalism and Republicanism are part of French culture,
the revolution spread those elements of French political thought and they were
embraced in most of Europe and North America (and to some degree in the rest
of the world).

~~~
ekianjo
I am not sure you really understand what Liberalism and Republicanism mean in
regard to French culture.

------
kfk
Europe is slipping down the wrong path. Instead of embracing the new, it's
holding tighter and tighter the old. In Italy there are many commercials about
the good old days that is frightening. And the very bad thing is that those
that are below 40 or 30 or 20 are aiming at what the "old" people have or had,
so they stay quite, they don't complain, and wait for their turn to be rich.

This is an extremely dangerous situation. There is no way in the world that
with that kind of thinking we get out of the debt crisis. There is no way in
the world that we even can keep up our promises of a welfare State in the
future. This will create higher and higher social friction; somehow France is
showing this earlier than other countries (must be a French thing, like the
French revolution, they always come first).

I mean, increasing taxation, without spending cuts, ends up mostly affecting
the young. But if the young stay quiet and wait, who is going to fight this
back? That's probably 1 of the biggest problems we have in Europe nowadays:
the people that should fight for change and a liberal economy are not, they
actually want a protected economy because they want the old to stay healthy,
so they will be when they replace them.

------
pixelcort
Wait, shouldn't we be trying to discourage cultural creation by the media and
instead encourage peer-to-peer cultural development? I'm assuming that,
although this mentions the funds would be widely distibuted, it would end up
in the hands of major media companies.

~~~
mindjiver
Of course, this is France we are talking about :) So either large politically
connected media companies or large state bureaucracies will benefit from this.

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outside1234
Hai there France, its the WTO calling.

PS. I can't for the life of me understand why having TV equals culture.
Honestly, IMO they should impose a tax on televisions so people buy less of
them so there is LESS TV if they really want culture.

~~~
potatolicious
In some countries public broadcasters don't have to stop the program every 15
minutes to beg for money, like the PBS does.

See: the CBC and BBC.

There are ways for television to surpass the lowest-common-denominator - we
just don't see this often in the USA, but it does happen elsewhere. Government
funded art need not be limited to crazy modernist sculptures sitting in front
of government buildings.

~~~
hnriot
The bbc get funding by taxing the population. Look at the backlash when we
tried that for healthcare, you can imagine how popular it would be!

------
azinman2
Instead of understanding what needs to change to enable tech entrepreneurism
in France (such as changes to bankruptcy and labor laws), they tax it to
encourage the things that they're good at -- that don't make any money.

Or... they could make the fundamental changes that will yield additional
domestic tax revenue and use that to pay for art. Nah... that'd be "un-
French."

------
yogar
So if you have already paid tax for culture, does that entitle you to download
it for free? Is it not a public good after that?

~~~
mercurial
No, it's a double penalty system. You use a storage media, you are guilty per
definition, but you will get additional punishment if you are caught illegally
downloading copyrighted material.

------
dvhh
At least a nice pretense to tax those company which regularly escaping tax. As
far as I remember there was a digital storage tax in France for that purpose
(blank media, extended to HDD, and finally extended to computer )

