Wednesday, October 18, 2006

Changing gears

Stepping aside from issues of Michael Ignatieff, Stephen Harper, and George W. Bush, let me return to one of my other favourite subjects: the problems with copyright law. My objections to current copyright maximalism basically come down to two biggies:

1) Current law effectively eliminates the growth of the public domain - copyright law is always being extended to prevent currently-copyrighted works from lapsing. I'm a big believer that culture is a cumulative endeavour, and contemporary artists should be able to draw on their predecessor's works, after a decent interval, without fear of sanction.

2) Current law really enriches a few major corporations at the expense of the far more numerous small artists. There's little to no evidence that small artists benefit from double-lifetime copyrights, and no evidence that the community benefits from retroactive copyright extensions.

There are a number of possible policy solutions to these problems, mostly having to do with changing the terms of copyright. But one that occurred to me yesterday is starting to appeal to me a lot more. Having dug around a bit, I'm mildly saddened to see that I'm not the first to think of it, but far more encouraged to think that other, smarter, people seem to think it's worthwhile: tax intellectual properties held by corporations as if they were regular property.

To illustrate: The most popular works are unquestionably valuable, and provide companies like Disney with lots of income. So the government sets a per-copyrighted-work flat tax, at a more-or-less arbitrary level at first. For each work that Disney owned the copyright, they would pay an annual tax of $X. The obvious immediate way for Disney to lower the levels of taxation - something all corporations seek to do, after all - would be to release the copyright on any works that did not provide an income of $X+1. Given that the majority of works held in copyright by major companies provide exactly zero income, this should quickly expand the bounds of the public domain. Of course, a corporation may choose to hold properties that it takes a loss on, but it would have to justify that decision to shareholders, in the face of possible lawsuits.

Do we do this already? I can't find anything with a quick search, but it seems like a relatively simple idea... I'd be surprised it we weren't doing this already.

Some criticisms of this idea that occur to me immediately:

"The government isn't going to have a decent idea what level of taxation to set, and could harm copyright holders with a mistake."
The answer here is to start low, and slowly move the tax up. Later, after the government gets a good idea what the effects of taxation are, it may be desirable to introduce some progressivity to the tax, so Star Wars and Harry Potter pay more for their copyright than other, smaller works. There's other creative ways to tax, such as increasing the tax for older works, but in the beginning experimentation should be curtailed.

"Doesn't this hurt artists?"
Not if the tax works as planned. The tax is specifically targeted to corporations, not individuals, and if we wanted to be extra careful we could specify "large corporations". These are all distinctions that the government works with all the time, so we don't have to reinvent the wheel. In fact, this might encourage corporations to hand the copyright back to the artists who created these works - that would also avoid the tax. Obviously I can't predict the future with 100% certainty, and if this idea starts to devastate the culture industry and artists are even more starving than usual, the government should reconsider.

"Large companies are creative with their accounting. Couldn't they get income from works without holding the copyright?"
Sure, and tax law already has to deal with such vagaries. Law could specify that a company would be taxed for any property they derived income from, or something similar.

Leave your criticisms in comments.

2 comments:

Anonymous said...

What's wrong with simply reducing copyright term to twenty years, software copyright terms to five, restoring the older more liberal fair use rules? In general, why not simply restore "intellectual propery" rights back to what they were in 1975? Seemed to work pretty well in encouraging art and innovation, and I don't think artists got screwed any worse than today.

john said...

To me, nothing is wrong at all with reducing the copyright term to 20 years - at that point, 99% of all works lose 99% of their value, so there's little reason - from a strict economic viewpoint - to doing that. Of course, others disagre...

But IP rights in 1975 were more extensive than that, even if they look positively Leninist compared to today.