LinuxLingam wrote:
> thanks for your response. (what's your name, btw?).
Sanjeev Gupta, although the nickname ghane stuck many years back in
college.
> your response is quite insightful and made me learn and look
> from a new angle.
Thank you. I hang around with economists, bankers, and people who
shape (or think they shape) financial policy.
> On Sunday 09 March 2003 10:15 am, you wrote:
>>
>> Excise, Duties, and other taxation should be an instrument of
>> fiscal policy, and should not be used to shape public policy.
> [snip]
>>
>> The two things are orthogonal. Taxes are levied to raise
>> funds for the Government. If something has to be discouraged,
>> taxing it is the wrong way. It allows the "rich" to get away
>> with it, right? Fines are not taxes.
>
> in that light, why should commercial software not be taxed?
> fiscally, a hardware box with a bundled software that is
> difficult to unbundle at purchase time should be taxed. do
> explain why not? else the same logic goes to the other extreme:
> why even tax hardware?
It is the Government's right to tax commercial software. I am not
disputing that. I am pointing out that the word "should" implies
moral connotations, and is not relevant to a discussion of fiscal
policy. There is no "should", "right", or "wrong" in taxation. There
may be side-effects of taxation that are beneficial, or not, but these
should be distinguished as by-products. The main principle of
taxation is revenue-generation.
This is why the Govenment taxes staples. Although the tax is
politically unpopular, the sheer volume means that is forms a
substantial addition to revenue. Taxing luxury aircraft, even though
it would be "better" politically, would not generate any revenue worth
bothereing about.
Govts tax what they can. Not what they should. To make up the
difference between these, the Govt institutes subsidies.
> the hardware industry usually goes into a loss or works on
> wafer thin margins,
Irrelevant. Taxation can tax loss-making groups as well.
> while software is where the real fat fat
> fat profits are, and not just profits, the power is given in
> the hands who make software, to shape, distort, destroy, mould,
> control, and do whatever with the captive audience who are made
> captive.
These are inflamatory words. Would you care to test these in court?
Lodge an FIR?
> and if software should not be taxed, then the industries which
> are not as profitable as software, should not be taxed at all
> either. why this unusual preference?
You are missing the point. Please go over the Finance Minister's
Budget Bill. Taxation has nothing to do with the taxee's
profitability.
Your view is fairer, kinder, and more ethical than mine. Mine has the
force of law and 350 years of economic thought.
>> The revenues from taxes may be used as an instrument of public
>> policy, of course.
>
> bang on! and nothing like a public policy that taxes the rich,
> and creates a new wealth of sharing, opportunity, and freedom,
> through the adoption and development of freedom-based software.
Taxing the rich does _not_ create wealth, unless you are defining
wealth very creatively, a la Enron. Taxation does not make any
difference to GDP, as no value is added. Taxation is the
transferrence of resources from subjects to Sovreigns.
> sound like good government.
Nopes.
--
Sanjeev
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