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European Protectionism

post #1 of 23
Thread Starter 
I love it when the shoe goes on the other foot, the EU whined like dogs when our protectionist measures came up, but look at <a href="http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020507/ap_wo_en_bu/eu_digital_tax_3" target="_blank">this</a>...

"The European Union agreed Tuesday to impose a new tax on products downloaded from the Internet including software, videos and music aiming to help Europe's Web-based businesses compete with U.S. companies."

What's that again?

"EU Taxation Commissioner Frits Bolkestein said the new tax rules "will remove the serious competitive handicap which EU firms currently face."

Isn't this the EXACT same attitude that Dubya was crucified for in European media in regards to steel tarrifs?

"The U.S. has complained the EU taxes pre-empt ongoing talks on Internet taxation at the Organization for Economic Cooperation and Development."

EU not playing along with policy talks?? NEVER!

"The U.S. Treasury Department fears U.S. firms will be required to charge the EU's value-added tax at higher rates than their EU competitors."

You want a trade war, friends?
Surely not!

The EU doesn't act in its own interests, it seeks only to play nice with the rest of the world, right?
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post #2 of 23
Uh.... So what they have a new tax. Not really 'Protectionism' as far as I can tell.
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post #3 of 23
Thread Starter 
Taxing foreign product to make your domestic product more competitive is protectionism. It's the very definition of economic protectionism.
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post #4 of 23
[quote]Originally posted by groverat:
<strong>I love it when the shoe goes on the other foot, the EU whined like dogs when our protectionist measures came up, but look at <a href="http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020507/ap_wo_en_bu/eu_digital_tax_3" target="_blank">this</a>...

"The European Union agreed Tuesday to impose a new tax on products downloaded from the Internet including software, videos and music aiming to help Europe's Web-based businesses compete with U.S. companies."

What's that again?

"EU Taxation Commissioner Frits Bolkestein said the new tax rules "will remove the serious competitive handicap which EU firms currently face."

Isn't this the EXACT same attitude that Dubya was crucified for in European media in regards to steel tarrifs?

"The U.S. has complained the EU taxes pre-empt ongoing talks on Internet taxation at the Organization for Economic Cooperation and Development."

EU not playing along with policy talks?? NEVER!

"The U.S. Treasury Department fears U.S. firms will be required to charge the EU's value-added tax at higher rates than their EU competitors."

You want a trade war, friends?
Surely not!

The EU doesn't act in its own interests, it seeks only to play nice with the rest of the world, right?</strong><hr></blockquote>

And let us say, Amen.
post #5 of 23
From what i have understand (but i can be wrong) the goal is that people from europe pay tax when they buy things from internet the same way they do when they buy things from the classical market.
I'll take an example : i download on internet toast 5 : i pay no taxes, i buy it directly in France i have to pay the 19,6 % tax. Whenever you buy products in france you pay taxes ranging from 5,5% (food for example) to 33 % (luxuous products) . Most of the product are taxed at 19,6 %. This is the law : i don't see why if you buy products on internet you should not pay the tax.
I have buy toast 5 from connextix and it has been send be fedex : so i have to pay the taxes. if i have downloaded it i did not have too, but i am happy to have the package.

So Groverat, if I have understand the law, it's nothing more than normal, it has nothing to do with protectionism. The taxes has to be the same whether the product is downloaded or buy in a package, or in a CD, or whatever.

The problem will be different if the taxes will be higher than 19,6 % for France for example.
post #6 of 23
What the doctor said.

And why this is more FAIR for the european companies without being protectionism:

We have a 25% sales tax in Denmark. If I was stupid enough to want a virus protection program for my machine I would have four choices:

1) Buy ProtectingX from an German developer in a box. 25%VAT.

2) Buy ProtectingX over the internet from a .de site. 16% (german VAT).

3) Buy XProtect from an US developer in a box. 25% VAT.

4) Buy XProtect over the internet from a .com site. 0% VAT.

Under this system we are actually protecting US companies from our national taxation. And I would think that the VAT for online products will be something like 15%.

What about those states where you have sales tax in US? What if, lets say Adobe, sell a product to someone in one of those? Don´t they add sales tax to that? I know they do to their boxed products so why shouldn´t they do it to their online products?

[quote]Originally posted by groverat:
<strong>Taxing foreign product to make your domestic product more competitive is protectionism. It's the very definition of economic protectionism.</strong><hr></blockquote>

No. Taxing foreign products differently than your domestic products is protectionism and as far as I see it we have reverse protectionism right now.

[ 05-09-2002: Message edited by: Anders ]</p>
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post #7 of 23
[quote]Originally posted by Anders:
<strong>No. Taxing foreign products differently than your domestic products is protectionism and as far as I see it we have reverse protectionism right now.</strong><hr></blockquote>

Exactly. And as the tax rates vary between the European countries, the Internet taxation rate is very likely to directly correspond to the country where you're living. For me this would mean 16% on all goods that are not food or books (which would mean 7%). I am from Germany.

Although I think this is a major disadvantage for me, it is purely logical and perfectly understandable.

TobyX

Edited: typo

[ 05-09-2002: Message edited by: TobyX ]</p>
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post #8 of 23
[quote]Originally posted by TobyX:
<strong>

Exactly. And as the tax rates vary between the European countries, the Internet taxation rate is very likely to directly correspond to the country where you're living. For me this would mean 16% on all goods that are not food or books (which would mean 7%). I am from Germany.

Although I think this is a major disadvantage for me, it is purely logical and perfectly understandable.

TobyX

Edited: typo

[ 05-09-2002: Message edited by: TobyX ]</strong><hr></blockquote>

Excuse me to go off topic here EU brethren.

25% sales tax!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

How much is the income TAX?!?!?!?!?!?!?!

Where does all that money go!!!!!!!!!

Sorry, but I have to wonder.

[ 05-09-2002: Message edited by: jakkorz ]</p>
post #9 of 23
[quote]Originally posted by Anders:
<strong>What about those states where you have sales tax in US? What if, lets say Adobe, sell a product to someone in one of those? Don´t they add sales tax to that? I know they do to their boxed products so why shouldn´t they do it to their online products?</strong><hr></blockquote>
There is a problem. If you run a business in a state with a sales tax (most states do have them), you're at a big disadvantage compared to internet companies like Amazon who can sell to you without a sales tax. Most politicians are against any internet sales tax at this point, but right now there IS a disadvantage to local businesses because of the sales tax exemption.

The same issue has been around for years with mail-order companies, though. Apparently some companies, like Apple, do add in the sales tax when you make an online purchase - I forget the rule exactly, but it has something to do with whether or not the company has a physical presence in the state they're selling to (?).

And in some states you're supposed to declare products you purchased from out of state on your income tax, and pay the sales tax then, but I doubt many people do that.

I live in one of the few no-sales-tax states, so I'm happy either way. Actually, many states have varying sales taxes by county, so you get people driving a couple miles north rather than south to get some beer. It's pretty silly.
post #10 of 23
Thread Starter 
So how again, is this not protectionism?

I've read stuff about how this will make it "fair" for European businesses, but yeah, that's obvious, that's the point of protectionism.

[quote]Under this system we are actually protecting US companies from our national taxation.<hr></blockquote>

What's that? "Protecting"?

<img src="graemlins/lol.gif" border="0" alt="[Laughing]" /> <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />

Sorry, just a little funny.

There are talks ongoing about internet sales taxes, the EU is being protectionist by pre-empting the talks and unilateral in their actions.

Not to mention the fact that they are hypocrites like the U.S. gov't.

[ 05-09-2002: Message edited by: groverat ]</p>
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post #11 of 23
[quote]Originally posted by jakkorz:
<strong>

Excuse me to go off topic here EU brethren.

25% sales tax!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

How much is the income TAX?!?!?!?!?!?!?!

Where does all that money go!!!!!!!!!

Sorry, but I have to wonder.

[ 05-09-2002: Message edited by: jakkorz ]</strong><hr></blockquote> We have free health care for all, free hospitalisation, free schools including universities. etc. etc.
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post #12 of 23
Thread Starter 
[quote]Originally posted by kelib:
<strong> We have free health care for all, free hospitalisation, free schools including universities. etc. etc.</strong><hr></blockquote>

Doesn't sound very "free" to me.

More like, "they take my money and spend it on that stuff for me".
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post #13 of 23
[quote]Originally posted by groverat:
<strong>So how again, is this not protectionism?

I've read stuff about how this will make it "fair" for European businesses, but yeah, that's obvious, that's the point of protectionism.



What's that? "Protecting"?

<img src="graemlins/lol.gif" border="0" alt="[Laughing]" /> <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />

Sorry, just a little funny.

There are talks ongoing about internet sales taxes, the EU is being protectionist by pre-empting the talks and unilateral in their actions.

Not to mention the fact that they are hypocrites like the U.S. gov't.

[ 05-09-2002: Message edited by: groverat ]</strong><hr></blockquote>
I don't understand what you mean by unilateral, taxes (not talking about the taxes for the foreign products wich is a multilateral and ruled by the Gatt) are inside politics, Mostly everything is taxed in France,Whenever it's french or martian. If the internet stuff coming from the US was more taxed than the one coming from EU : yes it's protectionism. Applying the same taxes to everyproduct is not protectionism. The problem of internet is that there was not tax possible until now. So the governement of EU see here a waste of income, and that's why they decide to tax internet. Personaly i don't buy the stuff saying that the lack of tax in internet is bad for european industry : until now, there was no tax in internet for everybody.

Personnaly i prefer direct taxes rather than income taxes. In France only 50 % of the people are paying incomes taxes, and the others have to support this. So if they give me the choice rather than to have an increase of my income taxe i will choose that all products downloaded on internet have taxes too.
post #14 of 23
Thread Starter 
[quote]The problem of internet is that there was not tax possible until now.<hr></blockquote>

There are talks ongoing about internet taxation. The EU has pre-empted these talk by applying their own system while talks were ongoing.

Sounds like something the U.S. would do to protect their own industry...
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post #15 of 23
[quote]Originally posted by groverat:
<strong>I've read stuff about how this will make it "fair" for European businesses, but yeah, that's obvious, that's the point of protectionism.</strong><hr></blockquote>

It won´t just make it "fair" but fair.

Listen I´ll try to make it clear for you: We have an sales tax here. It means that if I buy something here I have to pay 25%. If you sell anything to someone in Denmark that person have to pay 25%. If you send me MacOSX I have to pay 25% despite where you are as long as I am here in Denmark. If I buy a CD from US I have to pay sales tax before I can get the CD from FedEx while it has been added on one bought from a danish store and if I bought one from a state that has sales tax they didn´t have to pay sales tax in US. Period. Thats the law.

But things like services and computer code that doesn´t require a physical product is very difficult to tax because there isn´t any physical product that can be held back in customs. Since EU companies are paying the sales tax directly to the state for me there is no way around it for them like there is for foreign companies. But nonetheless there has always been sales tax on it. What EU is doing now is to make a system that ensure that our law is upheld.

If I lived in a state that had sales tax in US and was a Apple salesman I would be pretty pissed if someone in Denmark could sell MacOSX to my customers without my local sales tax being added. If it isn´t done in US I would strongly recommend that you started doing it so danish online shops don´t have a unfair advantage over the local shop. Thats the same thing.
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post #16 of 23
Thread Starter 
[quote]But things like services and computer code that doesn´t require a physical product is very difficult to tax because there isn´t any physical product that can be held back in customs. Since EU companies are paying the sales tax directly to the state for me there is no way around it for them like there is for foreign companies. But nonetheless there has always been sales tax on it. What EU is doing now is to make a system that ensure that our law is upheld.<hr></blockquote>

The question as to whether or not it SHOULD be taxed (these intangibles) is the question that the EU is pre-empting to PROTECT European industry!

Do you think American businesses aren't "hurt" in the same way that European businesses are being "hurt"?

My point really isn't that complicated.
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post #17 of 23
Nice snip, groverat. That's an article to remember.

On of the great things about the internet is that it;s really too hard to police. Not even the US can police it. The EU will have a hard time themselves.
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post #18 of 23
[quote]Originally posted by groverat:
<strong>

The question as to whether or not it SHOULD be taxed (these intangibles) is the question that the EU is pre-empting to PROTECT European industry!</strong><hr></blockquote>

It should be taxed of course. There should be no difference between a physical product and one consisting of 0´s and 1´s. Our law have never distinguished between the two and therefore it is not a question if we should start taxing it but a question on how we uphold our law. Illegal things have happened for the last five years and to ensure that the law is followed can never be claimed to be protecting european industry. And as a side note: It will not even benefit european industry but only european resellers. In most cases there isn´t really an european product that can replace Photoshop, Office ATL.

How difficult is it to understand that while every physical shop here and in US and internet store here selling bits without CDs have had to add sales tax to the price on their goods while US shops selling bits have been able to avoid the tax put on every product here. Even american stores selling real products has unfair competition from stores selling just the bits.

And what should we wait on? US to put sales tax on our products? To my knowledge most states doesn´t have a sales tax and those that do have my and the entire danish population to put the tax on our products if they haven´t done that already (as long as it is no different from the one on other products in the state). It is stupid not to have the same rules for all products just because they doesn´t have a physic presents. It has been practical reasons that has been holding us back (how to find out that a transaction has been made)
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post #19 of 23
[quote]Originally posted by Splinemodel:
<strong>
On of the great things about the internet is that it´s really too hard to police. Not even the US can police it. The EU will have a hard time themselves.</strong><hr></blockquote>

:confused: A country elect their parliarment. It make laws on how things should be taxed to uphold the social service that most people (through elections) have choosen they want. Now those with ressources chose to cheat the state for some money by buying their stuff through the internet and thus making it difficult to carry out the will of the people. Now why is that a good thing? Its like saying a crowbar is a good thing because you can use it to break into the bank. The anonymity of the internet is good for many thing but not when it is used to break laws.
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post #20 of 23
Thread Starter 
[quote]It should be taxed of course.<hr></blockquote>

To decide that is the ostensible part of the talks. The EU requires lots of tax money to fund their socialist ways, so they pre-empted the talks to protect their industries.
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post #21 of 23
[quote]Originally posted by groverat:
<strong>

To decide that is the ostensible part of the talks. The EU requires lots of tax money to fund their socialist ways, so they pre-empted the talks to protect their industries.</strong><hr></blockquote>

1) Look up socialism at dictionary.com

[quote]Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.<hr></blockquote>

No european country is socialist or anywhere near it.

2) Should US ask us for permission every time they found a way of upholding their own laws? No. Should we ask other countries for permission every time we want to uphold our own (decades old) laws? No.

Look. If we got a higher sales tax on things bought on the internet you would have an (very strong) argument. But this is just so stupid.

I hate repeat myself but reread this

If I was stupid enough to want a virus protection program for my machine I would have four choices:

1) Buy ProtectingX from an German developer in a box. 25%VAT.

2) Buy ProtectingX over the internet from a .de site. 16% (german VAT).

3) Buy XProtect from an US developer in a box. 25% VAT.

4) Buy XProtect over the internet from a .com site. 0% VAT.

And please note that in option four the buyer should actually have paid 25% according to our law. For the Xth time: This is a question about upholding our law. It can´t be that hard to grasp for you.

[ 05-10-2002: Message edited by: Anders ]</p>
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post #22 of 23
[quote]Originally posted by Anders:
<strong>

:confused: A country elect their parliarment. It make laws on how things should be taxed to uphold the social service that most people (through elections) have choosen they want. Now those with ressources chose to cheat the state for some money by buying their stuff through the internet and thus making it difficult to carry out the will of the people. Now why is that a good thing? Its like saying a crowbar is a good thing because you can use it to break into the bank. The anonymity of the internet is good for many thing but not when it is used to break laws.</strong><hr></blockquote>

No. It's capitalist justice, which mathematically speaking is the most fair, most equitable kind of economic justice. So I and most other capitalists have no moral issues over cheating the state in issues of taxation which are too difficult to trace. It's like cheating a cancerous tumor more than cheating a healthy piece of flesh.

On the other hand, I'm sure you pirate software and MP3's. If you want to talk about injustice, look no further than your process of stealing from those who deserve it.

The will of the people IS the internet, not the views held by hoity-toity washingtonian congressmen. Our government is not really in-touch with the varied wills of its many citizens, int he way the internet can be. If it were, there definitely wouldn't be this autonomous 2 party monolith in control. The United States was built on the concept that it's a citizen's wright to rebel against an oppressive government, and that's what I do when I feel the system is injust. I'm so pleased that there's finally a means, the internet, that's too much for any government to police, since it the force behind it is the population of the world, which apparently is very keen on capitalism and small government, if trends in internet milestones can be trusted.
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post #23 of 23
[quote]Originally posted by Splinemodel:
<strong>

No. It's capitalist justice, which mathematically speaking is the most fair, most equitable kind of economic justice. So I and most other capitalists have no moral issues over cheating the state in issues of taxation which are too difficult to trace. It's like cheating a cancerous tumor more than cheating a healthy piece of flesh.

On the other hand, I'm sure you pirate software and MP3's. If you want to talk about injustice, look no further than your process of stealing from those who deserve it.

The will of the people IS the internet, not the views held by hoity-toity washingtonian congressmen. Our government is not really in-touch with the varied wills of its many citizens, int he way the internet can be. If it were, there definitely wouldn't be this autonomous 2 party monolith in control. The United States was built on the concept that it's a citizen's wright to rebel against an oppressive government, and that's what I do when I feel the system is injust. I'm so pleased that there's finally a means, the internet, that's too much for any government to police, since it the force behind it is the population of the world, which apparently is very keen on capitalism and small government, if trends in internet milestones can be trusted.</strong><hr></blockquote>

Don´t you believe in democracy Splinemodel or is your system really taht screwed

Im (some kind of) capitalist too. But before that I am a democrat. If the overwhelming majority (&gt;98%) of the population in my country wants a certaint economic system where the state use parts of the national gross income (about 50%) on services for our citizents its the law and I have to follow it.

But of course I am a humantist before I am a democrat so if &gt;98% of th population wanted to put people in gas chambers, use capital punishment etc. I would fight it. I believe in revolution too if the government stomps across certaint rights. But keeping 70% of your income instead of 50% isn´t one of those rights above democracy I find it okay to break the law for.
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