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Hungary plans new tax on Internet traffic (reuters.com)
254 points by pzs on Oct 22, 2014 | hide | past | web | favorite | 118 comments

Some background.

- the proposed rate is 150 HUF/GB, that's around 0.5 EUR/GB or 60 cents/GB.

- the internet speeds in Hungary are relatively high, it's quite common to get 100 Mbps for $20/mo

- the minimum wage is around 250 USD/mo, the average net wage is $650/mo

- the levy should be paid by the providers, but probably they're going to be able to deduct it from their other taxes, that means profitable companies won't pay, currently non-profitable companies will

- the tax will be capped per subscription, the cap is rumored to be around $4 for individuals and around $25 for companies -- but most households have 2-3-4 phones, cable internet, etc.

- it's very likely that this is going to wipe out the currently loss-making telcos that can then be bought by the state (nationalized) and their assets funneled to cronies (even there was a public bid for the assets nobody would start a new company as it'd be making losses in the beginning therefore they could not deduct this tax from their taxes -- so it'd result in even more losses)

Also, it's very much likely that this is a deliberate distraction from the political conflict between the USA and Hungary that has emerged last week. (Edit: it's still bad though, as a journalist put it, it's like spraying pepper in the eyes of a pitbull: it's distracting, but you might end up in a really big trouble.)

The problem is not necessarily directly the tax, but the barriers and bureaucracy around it making the whole industry less dynamic. $4 per household is not in itself terrible. The cronyism is also a concern.

The reason policies like this are viable politically is because public policy economists are far more comfortable estimating the direct effects of a tax than they are estimating some of the murkier, but nonetheless inevitable implications. 1st year microeconomics students learn to draw the supply and demand curves, draw in the price after tax and calculate lost consumer surplus and profits. It's core economics material.

internet speeds in Hungary are not so high. Look at east Romania what offers, you get 1GBps for 7 euro/mo.

Romania is really an outlier -- but compared to the USA or the UK, Hungary still fares very well (a cheap 100 Mbps internet basically 'should be enough for anyone' -- not completely true, but that can serve multiple 4K video streams at the same time, so for most households it's perfect).

I am paying 50euro/month for 30Mbit/10Mbit Fiber in Luxembourg :/ In Italy I was paying about 25-30Euro/month for 20Mbit/1Mbit ADSL (and actually 20 was never 20 but more around 12-15..

Do people actually have multiple 4k montiors and multiple streaming services to serve content to those devices?

I pay about $40 for 50Mb/15Mb and there is barely anything I can do to max this out.

Please remember that not everyone lives in a household of one. A household hosting say, six independent people can easily cap a 100Mbps connection.

I was living in a household of ten heavy internet users on a 18Mbit/s line. The only times we had trouble was due to our service provider (outages, severe packet loss). This included mostly games and streaming.

I live with 3 people and unless someone is downloading a torrent there is no way netflix/hulu/youtube playing at once is going to cap 50Mb or 100Mb.

How about a group of 4 friends who buy a game on steam together and want to download it and try it out together? That can easily be 30 gigabytes that has to be downloaded by 4 people, capping the connection over a sustained amount of time.

Sure, but does any public policy need to be directed towards this use case, or the six simultaneous Netflix streams? I would think that increasing Internet adoption by 1% would have more tangible gains than increasing speed by tenfold, once you are at figures like 5 or 10 Mbps.

Yes, because there are many use cases which will crop up once internet speeds aren't so constrained in so many places. If you could download very large files very quickly in almost every location, I'm fairly sure that computing would change rather dramatically.

Think of it this way.

What do you think would have more effect on the world: Increasing processing power 100-fold, or increasing desktop usage by 1% of the entire world population? How about 10-fold and 5%? I can guarantee you it's the former.

download it once and copy over the files locally

You don't probably do torrent or just ignoring the fact that the vast majority of internet traffic globally is peer to peer traffic between dynamic IP addresses, so clearly torrent.

It's more true in case of Hungary where the minimum wage is around 250 EUR and people have a relatively luxury broadband speed, need (and addict) for car and historically good in pirating content since the world invented the VCR.

"Fun" fact: the reason why internet is cheap / fast is because of the webcam industry in Romania.

TL;DR: BitTorrent being the reason doesn't sound so interesting for a Vice article.

As a person who helped build a "district ISP network" back in the early 2000s, I can tell you that that reason is just some Vice.com style linkbait.

Romania has great Internet speeds because the authorities tolerated us installing cables all over the darn place. Back then it wasn't uncommon to have almost half a dozen ISPs in a one square mile neighbourhood, all offering 50-100 mbps in the city and 1-2 mbps actual Internet speeds, without any FUP.

We were almost the same age and people didn't care about the low international speeds because we could all share movies and music at 50+ mbps (and 0.5 mbps was more than enough for browsing).

This was happening way before the video chat industry took off. Also, for that kind of stuff you need good sustained upload, but the ISPs are still limiting the upload speed to around 30 mbps even for gigabit connections. This doesn't affect BitTorrent (which can be left open over night).

According to http://www.itu.int/ITU-D/treg/broadband/BB_MDG_Romania_BBCOM... , there was only a broadband penetration rate of 5,5% . Perhaps some of the Vice article are lies, but probably not all of them.. As bittorrent doesn't generate as much money as the webcam industry...

Could be, it's just "believing" that the article isn't a whole lie.

A very interesting counterexample to the notion that telcos are a "natural monopoly" because of the problem of laying wires.

I'm not so sure about that. Source: I'm Romanian. The best and most accurate explanation that I could find after a quick search was this one: http://np.reddit.com/r/europe/comments/2ct58s/average_intern...

""" tl;dr Romanians love movies, we needed a way to download them and fiber was the answer. Much cheaper than copper, no risk of the cables getting stolen. """

Spotted: Python programmer ^^^

I can tell you for sure, why Lithuania has fibre and 4G across country.

Most EU money are invested into country's infrastructure, there were lots of debates whether it is wise, as infrastructure by itself does not boost production. I can just assume that Romania and many other East Europe countries did the same.. It is not cheap at all to fiber up whole conutry, but when you have "free" money to spend, it suddenly becomes an attractive laundering option.

In my opinion, saying that country X has fast internet because users desire is a wild guess and only. I am sure Americans love watching video and skype'ing too.

I'd attribute it to the lack of pre-entrenched cable TV service.

If you want to connect a home, then the expensive part is laying the cables. If you've put in copper already, then putting in fiber is expensive; but if you're putting in a cable now (or recently) then putting fiber instead of (or in addition to) copper is cheap.

Stop talking shit.

4G coverage is not across the country, although not too bad, but its only one provider. Look at 4G coverage in Sweden.

EU money was used to fund RAIN and RAIN2 projects - connect the main cities and then rent out the lines to ISPs.

The (Swedish) monopolist ISP had reasonably smart CEO who realised that laying last mile in fiber costs same as laying it copper, but you'll lock-in your users for decades, no competition will ever be able to compete with that.

And the main reason of cheap fiber installation was fact that majority of people live in blocked houses, so population density is really high. Now look at households in US - massive houses, separated by massive land. One US house is probably equal to 20-30 Lithuanian families.

I think it's actually the other way around: The reason webcam industry has become popular, is because the internet service offers excellent speeds.

No, it's cheap because it was designed that way. People were poor and the wild West like environment let us build cheap infrastructure using plain copper based Ethernet.


12.45 EUR actually with VAT, assuming you just buy the Internet connection, and not as part of a package.

Are there data caps? Also, how is the upload speed?

No data caps, 100mbps in network, 30mbps upload speed to the internet at large.

> Also, it's very much likely that this is a deliberate distraction from the political conflict between the USA and Hungary that has emerged last week.

Strange theory. Have you considered they just need the extra money? Also, it wouldn't be a huge distraction anyway (from whatever) - I'm pretty sure they could invent more revolting taxes if they wanted to.

what you're referring to as 250USD/mo is basically unemployment benefits. i've got no idea where you got $650/mo from though.

-the minimum wage in hungary is actually 328 EUR (~430 USD) / month in 2014


-the average wage in hungary for full-time employed people was actually ~975USD / month in the first half of 2014.


$650/mo is the avg. wage _after tax_ (around 150kHUF) -- I should have mentioned that. You're absolutely right that I got the minimum wage wrong (I meant net minimum wage though).

You did mention it: "the average net wage is $650/mo"; I assumed "net wage" meant "wage after taxes". There's no star to indicate that this phrasing is the result of a later edit.

Oops, you're right. I assumed that the grandparent is right and I made a mistake without looking at my original post. Well, lack of self-confidence :) (I didn't edit that part of the original post.)

Actually this is just a smoke screen. As a native Hungarian I can tell you this. The Hungarian government is doing business with the Russians (we build a nuclear power plant funded by Russian loan) which the EU and the USA does not like. I don't like it either because Russia is blackmailing Hungary. There can be no good outcome of this situation because we either infuriate the Russians (we depend on the Russian gas) or the EU/USA. So the government came up with this tax nonsense as a distraction. As you can see they achieved their goal. Everybody is talking about the internet tax while the government is doing business with the Russians under cover. I don't like the 150 HUF/GB but I know how it works here. There will be an upper bound per month (say 4000 HUF) for the tax. The ISPs can put this tax as an expense in their books and in the end the user will see something around 1000-2000 HUF per month plus. This is how it goes here. Make no mistake I do not protect our government or the Russians. I hate both but I want you to see what really goes on here.

>So the government came up with this tax nonsense as a distraction. As you can see they achieved their goal. Everybody is talking about the internet tax while the government is doing business with the Russians under cover.

Sorry, but lest this is marked as "informative" by anyone due to it coming from a native Hungarian, I'd like to say (as a neighborhood) that this "it's a distraction" sounds like the usual ideas of how goverment works put forward by some blogs, columnists, that are not really grounded in reality.

It's not like Hungary only does "business with the Russians" for the very short term that this will be in the news, for it being a "distraction" to be effective.

It's also not like there would be any popular backslash on "doing business with the Russians" at this particular time either, so that they would need a distraction.

It's more likely that they just wanted an extra tax and some extra dough coming their way, and came up with this, sans distraction nonsense.

The opinion when this came up on /r/europe was that it was an attempt at clamping down on access to independent and non-Hungarian media by making internet use unaffordable.

Edit: well, that seems comprehensively debunked

it's capped at 4k HUF at most (~10€), that seems like a very inneffective way to do it.

I mean, you get free press (Metropol, elsewhere known as Metro, which IIRC is swedish) at metro stations, it would make more sense to tax _that_ if you really wanted to clamp independent media.

Also, many people with a smartphone aged 25+ have a company-payed one, so the tax is irrelevant to them. (source: anecdotal evidence as someone living in hungary)

Metro is not "free press", it's a joke of a newspaper. Nobody can seriously think to rely on Metro for political or hard-hitting news.

What if the tax is just a trojan horse? If it's introduced, the government will have to install "smart meters" somewhere, checking who consumed what in order to reconcile it with the amount of paid tax. The move from "smart meters" to "total eavesdropping capability" is then just a firmware update away.

Only they can already do that with the cooperation of the ISPs or control of the national backbones, with no need for some tax. And probably they are already doing it. And worse, the "five eyes" are doing too (worse, as they are not even your own elected government).

"free press" meant "gratis" in this context.

If you really think the political news/anything ratio is higher in the average megabyte of internet download than in Metro I am afraid you live in a very unusual bubble.

That doesn't hold water either. 150 HUF/GB is nowhere near unaffordable.

Actually without a datacap it becomes quite expensive.

Purchase a modern AAA game on steam, they're around 30G. Instant 15e additional tax when downloading it. And that tax gets paid every time you redownload anything.

Also netflix becomes a lot more expensive. 50 cents per hour for standard definition or 1.5 euros per hour in HD.

there is a cap on the tax though, you'd basically pay extra on the first couple of movies (well, there isn't any netflix in hungary, so you'd be paying for torrents)

Taxes paid by the non-elite only go up over time.

For personal use it's really affordable, but what about companies like saas, online magazine, newspaper etc?

They want to distract Hungarians not foreigners.

I know. That's what I tried to debunk -- its supposed usefulness (and even more so, need) as a way to distract Hungarians.

While it's probably smoke screen, it's outright stupid and very harmful. The context is a bit more complicated than Hungary doing business with Russia, the government probably does need this money as it's doing stupid (and counter productive) spending to increase their popularity among the the less educated and the ones who are less willing to think critically. From this perspective, their move is clever: it's smoke screen and they can back up later and they win or they don't have to back up that much and they also win. The only way for them to lose is if it turns out to be an ignition bomb (much like the plan to cut the trees in park Gezi in Turkey).

The move itself, even with an upper cap of 3-10EURs would be devastating and pointing to the wrong direction. Hungary's only option to rise would be education and the strengthtening of the IT sector. But that would need at least 10 years of investment and we're still only talking about it. BTW, there was a news bite I think on the same day that this utter stupid move was announced, that we should make the IT education stronger, we should teach more IT in elementary school, blah-blah. Sounds like something that should have been (and indeed have been) said in like 2000. Yet nothing happened, apart from cutting back IT classes last year.

This is yet another step in the wrong direction. Totally wrong direction.

Oh, and the context: the national tax authority has been known and proven to support criminals who stole around 30M EUR of VAT/yr. It's been in the news, nothing happened. Then the idiots tried to force a US company to pay them (high ranking officials of the tax authority) to launch attacks on the competition of the said US company. That's when they notified the US authorities and that's how prominent Hungarian politicians (and/or their immediate comrades) were banned from the US. And this is what this smoke screen is intended to cover. Hopefully it will add up in the heads of people.

Correction: it's indeed 30Bn EUR/year...

Actually I think it’s more related to the corruption charges: http://www.reuters.com/article/2014/10/20/us-usa-hungary-idU...

It's a pretty bad smoke screen if it makes more people angry than the other issue they trying to "smoke". Even if it will cost less it's a bad PR for the government and can lower their popularity among the young generation who didn't care about the other issues.

How exactly is Russia blackmailing Hungary? Are they preventing Hungary from doing business with the EU or USA? What threats are used?

From what I read (even from your own comment), it's the other way around.

The US doesn't want Hungary to do business with Russia and it even threatens the Hungarian government. For example, the US administration banned Hungarian govt officials from entering the US a few days ago.

But I have yet to read about a single threat the Russians made towards the Hungarians, if they do not stop doing business with the US.

I'm maybe a bit more libertarian than most HN readers, which is already a bit more libertarian than most people (especially Europeans), but when I do support taxes, I'd rather they be as broad-based as possible, unless they're targeting something which has negative externalities.

Universally applied VAT is (aside from the data-collection requirements) proven to be one of the least economically distorting taxes -- creating the least deadweight loss.

This tax seems almost pathologically bad -- taxing something with largely positive externalities. Normally you try "sin taxes" which tax things reviewed as having NEGATIVE externalities (CO2, smoking, even unhealthy foods).

It's like taxing people for reading books, or for volunteering their time to useful charities, or for picking up litter on the street. Actively discouraging something which has positive returns to society as a whole when people use more of it!

It seems to me more like an infrastructure use tax, which seem to work fine. Don't you pay usage-based taxes for the public roads (via gasoline taxes)?

Now I guess the next question is, are the pipes in Hungary publicly owned.


I really hate this mindset. These businesses aren't being killed by the internet - they've simply outlived their use.

This is the risk of being a business in transport. If a cheaper, faster and more accessible form of transport comes along you go out of business. Not because something has killed you or your business (you are perfectly allowed to still do your business as you like), but because you aren't useful anymore.

For example the milkman disappeared with the invention of refrigerated transport. Not because the milkman was killed, but because he was no longer useful.

Please, do not defend things that are not useful.

s/milkman/CD/ s/refrigerated transport/internet file transfer/

I agree, but I'm no milkman.

Amazon (books etc), Google and Facebook (advertising), Apple (music and movies), and many other Internet companies take jobs from Hungarian voters. And as far as I remember these companies don't pay much tax.

They probably add some jobs, but if you worked in the bookstore, the advertising agency or the record store, and your job was lost to the Internet, you would be the one feeling the externalities of the Internet.

I don't know, why he is downvoted. He actually makes valid points.

The internet and globalization as a whole open possibilities for less developed countries. At the same time, they are often exposing their markets to competition they simply cannot compete with at this point.

The common argument is, that these countries should open up, catch up in education and participate in the next wave of innovation (e.g. skip the web, go directly to mobile) or learn from the faults of the first movers (e.g. European cc-payments requiring pin).

But when we look at the country arguably profiting the most from globalization, China, we find that it is massively protecting its market by requiring joint ventures with local companies and blocking internet-based companies, which could circumvent these measurements.

These points do not mean, that taxing internet traffic is the right thing to do, it just means, that not all regulations are bad. You have to look carefully at each industry. In Germany taxis are strongly regulated. Drivers get special trainings, the cars have to be checked more often than regular cars, a taxi has to accept every passenger and so on. I support them fighting Uber, which ignores these regulations and is trying to build a monopoly by competing on price. And monopolies are bad for workers and in the end customers, even if Peter Thiel wants to sell a book.

Edit: His parent comment is now dead, but you can get the context out of nightcrackers answer.

Right, and after losing their job those people are supposed to pay the taxes that Amazon, Apple, etc don't. Because as an out-of-work individual you're much better posed to pay taxes than a transnational company that's too rich for its own good. Sounds like a perfect Mafia scheme to me.

    The Internet, while most of us don't care, has negative externalities
    as well:

    - killing hundreds of thousands of businesses such as bookstores, movie
    rental stores, record stores;
    - makes it possible through IP telephony,
    email, the web, collaboration tools etc. to outsource millions of jobs;
    - is a time consumer like no other before;
With that philosophy, agriculture would still comprise 100% of the economy. Yes, everybody, even kids, would have a job, but who wants that standard of living?

Also, about wasting time on the internet, maybe for you socializing or gaming is a waste of time, but before internet people also did this, additions already existed back then you know.

    Yes, the Internet creates businesses as well but I don't think I've ever
    used a Hungarian Internet business. Also, the outsourced jobs go mainly
    to Asia. I could see why a conservative government would tax the Internet.
That's because you don't live there. When you know several languages, you see there are huge properties outside the five eyes Internet.

It's not a philosophy. It's how politics work.

I don't think Hungary will return to pre-industrial times because of an Internet tax.

> I don't think Hungary will return to pre-industrial times because of an Internet tax.

It will not return but they'll be stuck there. This will have a chilling effect on the economy, and about all new jobs enabled by the internet? no new job will be created, they'll go to other countries without imposed tax barriers.

Nonsense. There are hundreds of direct and indirect taxes in any modern economy. A 175 million euro tax is one of the least important ones for the economy.

Income taxes, capital gains taxes, corporate profit taxes etc. are much more important, even to most Internet companies, than the proposed Internet tax because they are much bigger.

Even if only one person can't use the internet because of this tax, that's more than enough reason to avoid it.

If I'm not mistaken, prezi is hungarian and very widely used

> I don't think I've ever used a Hungarian Internet business

There are a couple of successful ones though - Ustream is quite widely used, so is LogMeIn or LiveJasmin (webcam porn).

This is insane.

As a local I can't decide whether this action is just to deter public discourse on the recent claims of political corruption (that involved banning the Director of National Tax Authority from entering US) or if it is for real. Either cases are really, really bad.

Orban is fucking insane! What the hell are you thinking? I hope you will get rid of that maniac ASAP.

What are his chances of staying out of jail when/if he relinquishes power?

Holy shit ... downloading a steam game will cost more than the game. They already get VAT on the connectivity.

First - IT in Hungary dies.

Second Hungary is on the bleeding edge of mesh networks.

A 60 cents per terrabyte excise seems less unreasonable.

I can definitely see wide LANs or mesh networks starting to appear in Hungary, and I can also see the government making them "illegal" within 3 years of them appearing (would probably impact LANs more than mesh networks, but probably not that much either of them).

exactly, more power to projectmeshnet.org and serval. they can always resurrect fidonet, it's still in use in Ukraine and Russia. host mirrors of the most popular resources, wikipedia, imdb, gem, apt and git repository's just like in the bbs & ftp days. use goldbug for mail and chat, yacy for a veronica like meshspace search engine and twister and tribbler for p2p blogging and vlogging.

Actually this smells like a business oportunity from the neighbour Romania providers to offer hi speed microwave / wireless links from over the border. Couple that with a mesh network, you got "free" internet ( as in free speech ).

The monthly cost per subscriber is capped at $4ish.

That might be a good situation to remember that almost all television and radio stations in Hungary are under governmental control and so it might make sense for the government to keep people away from too much Internet usage.

Let's consider the effects of a tax on internet service providers. Critically: the tax is levied in Hungary, but not in surrounding countries.

The average household net-adjusted disposable income per capita in Hungary is $15 240 [1]. At 60¢ per GB, the tax is not breaking household budgets. Neither should it be onerous for bootstrapped small businesses. Moving hosting out of Hungary would mitigate most of their tax burden (live media would be an exception).

The case becomes more interesting when we consider scaling. Few businesses today can compete with underpowered IT. The bandwidth needs of a business's IT operations can be assumed to scale with the enterprise. Speaking as a financier, this sets up an easy transaction. If your business scales, move it out of Hungary. The benefits of offshoring scale with the company.

Avoiding that incentive structure is probably why we see the corporate tax offset. But a tax deduction is only of value to profitable companies. This turns the linear scaling disadvantage into an option-like structure. If you scale AND experience losses, there is a penalty for being in Hungary. The more cyclical or volatile a company's earnings, the greater the risk of incurring the tax and thus the benefit for offshoring. If I were a European M&A banker, I'd be working out the ceiling on earnings volatility a Hungarian company would rationally tolerate given this tax. I'd then run through the stock market and private holdings records and begin working to merge those for whom this tax would be risky out of Hungary.

Start-ups are also loss-making business entities. For a bootstrapping Hungarian, the cost of relocation isn't worth a few hundred dollars in tax savings. But for a VC it may be. If I were Austria, the Czech Republic or Poland, I'd offer every Hungarian entrepreneur a deal: We will lend you money for relocation. You repay it at 1/2 the tax we estimate you would have paid in Hungary. If I were a European VC, I'd be dusting off a recruiting pitch for bright Hungarian engineers and entrepreneurs.

[1] http://www.oecdbetterlifeindex.org/countries/hungary/

The libertarian panic is amusing. There's nothing inherently wrong with taxing internet traffic, unless you believe tax itself is wrong. Virtually everything that goes into providing internet services gets taxed, so why should internet traffic itself be sacred?

Of course it is still a Very Bad Idea(TM) in terms of economic and social impact versus benefits. And of course in the context of a totally corrupt country like Hungary there is a distasteful hidden agenda behind it.

But besides being counterproductive, tax on internet traffic is just "meh". We just don't want to pay tax on our stuff.

Would you say that 501.3c's are a bad idea? If not, they you have to agree that shielding certain activities from taxes is in the best interest for society. So why do you think increasing the barrier to entry for a society to communicate, create, discuss is positive?

there is an upper limit(cap) in the tax, per month, max 700 HUF (2.2 EUR) for population and max 5000 HUF (16.3 EUR) for companies. This text is hidden in the proposal. Just media is not reading it with attention.

Nope, it isn't. The proposal (http://itcafe.hu/dl/cnt/2014-10/112746/01705.pdf) only contains the number '700' twice, one is unrelated, at the other occurrence the text says that the tax on phone calls and text messages cannot exceed HUF 700/mo/subscription.

After the outrage now there're rumors about these caps, but they were not part of the proposal.

I confirm it will be a cap, even if you can't find in the text. It will be 700.

As a result of an amendment after the major uproar. You said that

"This text is hidden in the proposal. Just media is not reading it with attention."

Both statements are untrue.

As a result of an amendment after the major uproar.

Isn't this why we have proposals?

Doesn't sound so dissimilar to the EU's Internet tax that was planned years ago (not sure if its email tax plan was part of the same thing). I don't think it would be unreasonable to assume that this plan would get some support at European level.

In the UK our last government imposed an Internet tax, but at a flat monthly rate. Fortunately, it was scrapped.

There have been some schemes in Europe to tax Internet-related services, but they were mostly a result of lobbying and at least benefited some group, like unionized film makers or ISPs. But the difference is nobody welcomes this tax.

This relates to my biggest fear with net neutrality. I don't think that NN and internet taxes are directly related. I just worry that once the government gets tinkering under the hood with the internet they are going to find a few other things they'd like to change as well.

I really think EU/NATO/US should step up covert and intelligence activities to overthrow the Hungarian government. A backwards and evil regime that has taken over Hungary should not be permitted to exist in the heart of Europe.

This is what the US did to Brazil (where I live) and, trust me, when it happens it's never to protect a democracy but rather to prevent losses to American economic interests. Also, if you live there, you really don't want it. Or shouldn't want it.

I don't think undemocratically overthrowing an elected government is a great idea, even if it's really unpopular. At least wait until they fail to run elections.

Dude, calm down. Human rights violations absolutely have to be sanctioned, sure, but transparently and above board. To be honest, at a certain point I'm fully in favor of tossing Hungary out of the EU (it's no place for authoritarian regimes), but covertly overthrowing governments? Not cool.

How much are we willing to hurt an economy with sanctions and embargoes (Iran, Cuba anyone?), instead of focusing on overthrowing a nasty government?

I'm being somewhat facetious here, as current Hungary is far from the point where direct action against govt could or should be considered.

I'm just stressing the point that punishing the populace for the sins of the leaders is also uncool ceteris paribus.

PS: I'm Hungarian.

Well … I don’t think you can underestimate the threat of throwing Hungary out of the EU. But it’s also a politically risky move (there are large groups of people – maybe not majorities, but large groups – in many EU countries who do want out and any indication that that’s a realistic option politically, even if it’s throwing a member out, would provide lots of political cover for those groups), so ultimately unlikely to happen. Also, Russia would be more than happy to pick up any stragglers, and that can’t be good for anyone.

Honestly, I have no idea how the EU should deal with Hungary (or, if we generalise the problem, any member state getting an authoritarian government). I’m deeply, deeply uncomfortable with anything involving actual violence. That’s the Europe of that past and that Europe was a horrific place I never ever want to return to. The EU should be able to solve internal conflicts politically. That’s the issue here. And the EU can’t (and shouldn’t) force radical change inside countries – but it should be a vigilant watchdog for human rights. I’m just not sure exactly how to implement that in practice – but I’m certain I don’t want violence.

I live in Croatia, and it makes me uncomfortable there is a Pro-Russian and unusual regime popping up in Hungary. This thing needs to be acted upon and taken care of quickly.

you might remember that at the recent budapest elections FIDESZ won again.

Yes, they are a bunch of corrupt evil baby eating monsters, but they are also who the people keep voting.

I am not sure "let's remove democratically elected governments we disagree with" is the direction where we want EU/NATO/US to go.

They are Pro-Putin regime in a devious way and Russia is basically in war with Europe. I think they should face some kind of heat.

so they can over-win the next elections by campaigning as the Proud Small Sovereign David against the Evil European Union Interference? That seems a rather stupid move.

I'm not sure what you mean by "evil". If you mean "corrupt", sure. But it has never been a reason to forcefully evict a government, as long as they behave. I'm not sure Orban is more corrupt than, say, Berlusconi was, your average Romanian official, or the Turkish government. He'll do some damage, his friends will get rich, and at some point he'll be be out of office. Unless he starts taking himself a bit too seriously and attempts to turn Hungary into a dictatorship. Then that's a whole different ball game, and the EU would most certainly not stand for it.

In 7 years on HN this is the first time I've wished I could downvote a comment. I dislike Orban's policies as much as anyone, but subverting the democratic process of another nation just because you don't agree with the results is plain evil. Unless of course crimes against humanity are committed, but so far I see no evidence of that. This voluntarist mindset is diseased and profoundly anti-democratic.

Ok, this is a contrarian opinion, but I think this is a great idea. This is an experiment and there isn't any data around the impact of a broad tax on internet on the economy. If Hungary implements this tax, then every other country can use that data to inform their own decisions about taxing the internet. In reality, as everyone has already pointed out, this experiment will fail horribly - which is great, because eventually SOME country or state is going to want to do this and I'm glad the experiment is being run in Hungary and not the United States or the EU.

Hungary is a member of the EU.

Well, fair enough, but does that detract from my point?

Internet traffic tax, aka brain drain guarantee.

Other commenters are saying there's a 700 HUF (2.2 EUR) cap for residential lines. I don't think people will be leaving the country en mass because of that

Exactly. That's the most scary thing about it.

Does anybody know how to make the server execute "git pull" once I push the code from my local machine?

I see some convoluted tutorials that involve setting up certificates and such, I wonder if there's an easier way.

I think the only thing surprising about this is that it happened sooner than later. Eventually we will see more states imposing taxes on information.

In a sense, if they gave you free education and you used that education to create new information, then they own a certain stake in it.

Just like sales tax is used to subsidise or oversee certain business, data tax will be used fund cyber policing, censorship and such. Also, it may ensure that we don't drown ourselves into pointless data. Just like businesses are forced to engage in certain activities (typically innovative) that can generate certain markup for the whole system to be sustainable.

>In a sense, if they gave you free education and you used that education to create new information, then they own a certain stake in it.

What?! Does that mean the local water company owns a stake as well? I mean, I couldn't have possibly survived to receive that education without a source of clean water, right?

And what about the people who didn't receive a state-supported education (ie, private schools and home schooling). Are they exempt from this tax of yours?

Not only that, they took a lot of money in exchange for that "free" eduction -- often from people who didn't even use the service. So no, they don't have a "stake" in the products of anyone's mind. That's repugnant.

It is and I am not arguing for it, just merely accepting it and looking from the point of view the government thinks.

What government are you talking about? Does "free" education implies the obligation to give all your life work output to the government? This seems very foreign, please name at least one country that implements those ideas.

I was merely speculating, but I think Hungary might set the precedent.

Alternatively, whenever you buy storage media (DVD-R, HDD) there is a surcharge that goes to authors. That's all done on the premise that this media will be used for piracy.

You already pay tax on information when you watch Netflix or licence a patent.

Also I did not say give it all to government.

Well you paid for your water directly.

I did not say this is fair for anyone.

But information isn't a taxable item, since it's not a monetary amount. It would be like taxing electricity. You can tax the money you pay for it, but not the information itself.

You're not using your education to generate data. Most of the data is made by other people's education and then multiplied many times. Even for cases where you do create information, like in your comment, many magnitudes more data was sent over your line to get it before my eyes. If they wanted to tax new information, they wouldn't do it through a flat fee per GB.

Sales tax is a tax on a monetary exchange. You tax the price you pay for your shoes, you don't tax "$3 per shoe". The point of that is taxing value rather than quantity. How you use the tax money it is irrelevant to how you acquire it.

And last but not least: we're already drowning in 'pointless data'. A lot of the internet's capacity is used to transfer scripts and styles rather than real information. Whether you consider that pointless is a different matter, but it's not up to the government to say what you should consider pointless data and what you shouldn't.

> like taxing electricity

Carbon credits?

Carbon credits are a sale of "carbon capacity" for money, again here the money is taxed, not the credits themselves.

Ok you are right, most taxes are based on value, although alcohol and tobacco is taxed by unit. One could probably argue that certain information falls into this category.

that's an interesting point. I didn't consider excises. Those are usually levied on products that harm the user or the environment in some way, though. I doubt you can argue that internet data harms the planet :p

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