If data is the new oil then why don’t we tax it?
My data is worth something to Google, and Facebook, and Twitter, and Amazon… and just about every other Internet behemoth. But alone my data is worth a really tiny tiny amount.
I’d like to charge Google and co. for having my data. The amount they currently pay me – free search, free email, cheap telephone… – doesn’t really add up. In fact, what Google pays me doesn’t pay my mortgage but somehow Larry Page and Sergey Brin are very very rich. Even if I did invoice Google, and even if Google paid we are talking pennies, at most.
But Google don’t just have my data, they have yours, your Mums, our friends, neighbours and just about everyone else. Put it all together and it is worth more than the sum of the parts.
Value of my data to Google < 1p
Value of your data to Google < 1p
Value our combined data to Google > 2p
The whole is worth more than the sum of the parts.
At the same time Google – and Facebook, Amazon, Apple, etc. – don’t like paying taxes. They like the things those taxes pay for (educated employees, law and order, transport networks, legal systems – particularly the bit of the legal system that deals with patents and intellectual property) but they don’t want to pay.
And when they do pay they find ways of minimising the payment and moving money around so it gets taxed as little as possible.
So why don’t we tax the data?
Governments, acting on behalf of their citizens should tax companies on the data they harvest from their users.
All those cookies that DoubleClick put on your machine.
All those profile likes that Facebook has.
Sure there is an issue of disentangling what is “my data” from what is “Google’s data” but I’m sure we could come up with a quota system, or Google could be allowed a tax deduction. Or they could simply delete the data when it gets old.
I’d be more than happy if Amazon deleted every piece of data they have about me. Apple seem to make even more money that Google and make me pay. While I might miss G-Drive I’d live (I pay DropBox anyway).
Or maybe we tax data-usage.
Maybe its the data users, the Cambridge Analyticas, of this world who should be paying the data tax. Pay for access, the ultimate firewall.
The tax would be levied for user within a geographic boundary. So these companies couldn’t claim the data was in low tax Ireland because the data generators (you and me) reside within state boundaries. If Facebook wants to have users in England then they would need to pay the British Government’s data-tax. If data that originates with English users is used by a company, no matter where they are, then Facebook needs to give the Government a cut.
This isn’t as radical as it sounds.
Governments have a long history of taxing resources – consider property taxed. Good taxes encourage consumers to limit their consumption – think cigarette taxes – and it may well be a good thing to limit some data usage. Anyway, thats not a hard and fast rule – the Government taxes my income and they don’t want to limit that.
And consider oil, after all, how often are we told that data is the new black gold?
– Countries with oil impose a tax (or charge) on oil companies which extract the oil.
Oil taxes demonstrate another thing about tax: Governments act on behalf of their citizens, like a class-action.
Consider Norway, every citizen of Norway could lay claim to part of the Norwegian oil reserves, they could individually invoice the oil companies for their share. But that wouldn’t work very well, too many people and again, the whole is worth more than the sum of the parts. So the Norwegian Government steps in, taxes the oil and then uses the revenue for the good of the citizens.
In a few places – like Alaska and the Shetlands – do see oil companies distributing money more directly.
After all, Governments could do with a bit more money and if they don’t tax data then the money is simply going to go to Zuckerberg, Page, Bezos and co. They wouldn’t miss a little bit.
And if this brings down other taxes, or helps fund a universal income, then people will have more time to spend online using these companies and buying things through them.
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