CBO Says PROTECT IP Will Cost Taxpayers Over $10 Million Per Year To Censor The Internet

from the why-are-we-doing-this-again? dept

The Congressional Budget Office (CBO), who tries to estimate the cost to taxpayers of all new laws proposed by Congress has put out its report on the PROTECT IP Act, noting that it will cost taxpayers $47 million (pdf) from 2012 to 2016. Specifically, the CBO notes that the Justice Department would have to go out and hire 48 new people (22 special agents and 26 support staff) to act as Hollywood's censor police -- and that the annual cost will run about $10 million. Separately, the CBO notes that outside of the cost for taxpayers, the law would certainly impose costs on a variety of tech companies, by placing liability and requirements on them in regards to sites picked by Hollywood and the Justice Department to censor (you know, sites like that bastion of "piracy," the Internet Archive, which Hollywood has already put on its evil pirates list). However, it does not estimate that additional cost on those companies, since it will depend heavily on "future judicial proceedings."

Re:

And they'll make it all back and more in tax revenues. Recorded music sales have gone up ever since Limewire was shut down almost a year ago.

Are the taxes from recorded music somehow higher than the taxes people spend to buy physical goods? Does the average consumer somehow get more in their paycheck when this law goes into effect? If neither of those are true (and they're not), then you're living in fantasy land.

Re: Re:

Oh no, it is definitely the case. When will you people learn that all pirates burn the cash they save through said piracy? That's the real reason for the economic crisis. We are running out of money. Businesses aren't hiring. Jobs are being lost, all because pirates keep burning up the money supply. Ever since Limewire got shutdown the federal reserve has finally been able to print at an equal rate of pirate burning. We have to pass this law so that even more piracy will stop and then the cash printing will exceed the cash burning. It's the only way to get us out of the economic recession.

Re: Re: Re:

Exactly! The Pirates destroy the rules of economics where the money they remove from the system causes inflation! Meanwhile the underhanded accounting of the recording industry helps the economy by avoiding taxes.

Re: Re: Re:

When will you people learn basic economics?

When something is overpriced and the market find a way around it those prices are going down and so it is all the infra-structure that supported that way of doing business jobs will be lost of course in that scenario, OTOH when the market is subvalued jobs are added because more people are trading those things and helping create new markets while maintaining others.

Just look at places like Nigeria(Nollywood), India(Bollywood), China, South Korea and Japan and compare that to markets that are sunking like US and Europe.

Piracy is the way the market will adjust itself to the economic reality of the market, you can like it or not it won't chance the outcome.

Re:

"Recorded music sales have gone up ever since Limewire was shut down almost a year ago."

And how does that translate into taxes?

1. Almost nobody pays tax on internet purchases.
2. Even if they do, there's no Federal Sales Tax.
3. Large corporations like the music industry don't pay taxes, they contribute to tax-free campaign funds.

Re: Re: Re: Re:

@Masnick

I guess you missed this comment above:

"hat's incredibly inaccurate. It may be targeted at non-US companies in terms of takedowns, but it will place tremendous liability on US companies in terms of compliance. That's going to harm US tax revenue also.

The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.

Really? Which US companies do you think will dissolve and become foreign companies? American Express? Visa? Paypal? Diner's Club? Mastercard? Or perhaps the ad networks like Google's Adsense? I'm pretty sure a non-US company cannot provide broadband service so that eliminates them. I can't see any company that has skin in the game fleeing the US to avoid the corporate responsibility associated with stopping criminal infringement. I don't recall any banks leaving the US when onerous anti-money laundering laws were imposed on them. How is this situation different?"

Re: Re: Re: Re: Re:

Re: Re: Re: Re: Re:

Really? Which US companies do you think will dissolve and become foreign companies?

Did I say it would dissolve companies? No. I said it would put serious burdens on US companies. Which is the entire point of the bill. Because the entertainment industry is filled with people who don't want to adapt, the PROTECT IP Act is yet another attempt to get the tech industry to try to turn back the clock for them.

Re: Re: Re: Re: Re: Re: Re:

So, genius, explain this...

Where exactly would the content industry be without the tech industry to provide them with all the cameras, projectors, sound systems, recording equipment, TVs, VCRs, DVD players, computers, software etc., that the content industry uses to both create their content and get it to the masses of people out there that want it?

Sure seems to me like the content industry, who is completely technologically inept, has been making billions off the backs of the tech industry. In fact the only reason they are even capable of creating their content is because of the brilliant minds in the tech industry.

Perhaps its time the tech industry as a whole started their own collection societies and started charging every time one of their inventions was used. Movie studios would have to pay X amount every time they used a camera, theaters would have to pay every time they used a projector plus factor in how many people they're showing to, or by capacity, and pay X amount for that. Sound familiar? Can you see where this would go?

Re: Re:

Re: Re: Re:

On the blah blah blah it is only supposed to be a tool for foreign websites on practice it can be used against anyone.

Google selling music in China, bad Google we will smack you down, Zynga doing something we don't like, bad Zynga you get a smackdown, Facebook not being able to stop somebody from doing something we don't like bad Facebook take it like a man now.

This means that anything inside the US is now a liability, so people just need to pull out of the US market and close their own markets to Americans because sure as hell if they start claiming jurisdiction for things that happen legally in other countries just because American law doesn't allow it, others countries will slap the USA silly.

Want to see how that will work?

Where is the USA claiming justice against baidu.com? or PPTV.com?

They are not, wanna know why? because the chinese would fuck them up that is why.

Re: Re: Re:

They target both, increasing liability for domestic websites. If you don't answer the summons, you lose your domain through an ICE takedown.

If you're a foreign website you lose your domain, period. So it's more difficult to put up anything and provide a service locally to an area, and it's failed enforcement all around. What exactly is your point? And why did you ignore the point I put up above to ask me this question?

Re:

@MRK- Protect IP is exclusively targeted at non-US companies. If you are going to comment, it'd be helpful if you knew what you were talking about

That's incredibly inaccurate. It may be targeted at non-US companies in terms of takedowns, but it will place tremendous liability on US companies in terms of compliance. That's going to harm US tax revenue also.

The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.

Re: Re:

That's incredibly inaccurate. It may be targeted at non-US companies in terms of takedowns, but it will place tremendous liability on US companies in terms of compliance. That's going to harm US tax revenue also.

The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.

Really? Which US companies do you think will dissolve and become foreign companies? American Express? Visa? Paypal? Diner's Club? Mastercard? Or perhaps the ad networks like Google's Adsense? I'm pretty sure a non-US company cannot provide broadband service so that eliminates them. I can't see any company that has skin in the game fleeing the US to avoid the corporate responsibility associated with stopping criminal infringement. I don't recall any banks leaving the US when onerous anti-money laundering laws were imposed on them. How is this situation different?

Re: Re: Re:

You think anybody will put a penny inside the US economy if they can have their assets seized by some stupid reason like doing something legal in their own countries and being charged with a crime inside the US?

Think again, if you thought the house bubble was bad wait until foreign investment starts dropping.

Re: Re: Re:

Where does Mike talk about companies dissolving and moving overseas? He doesn't.

Mike addressed who was affected by PROTECT IP:

* Non-US companies may be affected, because their domains will effectively become invisible to US citizens.

* US companies may be affected, notably those that run DNS servers. Implementing PROTECT IP will require updates to DNS software/hardware, and there will be other ongoing costs of compliance.

Never mind that all of these measures can be worked around by simply using a different DNS server. (PROTECT IP works in the same way as unlisting a number from the phone book. If you can't turn a name into a number, you can't make the call. The workaround is like using a 3rd party phone book, one which still has the number listed.) So in other words, PROTECT IP will cost a lot, but won't do anything to protect intellectual property.

Re: Re:

The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.

No, you ridiculous buffoon, it will indeed result in more sales. Besides simple logic telling you so, there is also the empirical evidence that is recorded music sales going up and staying up since Limewire was shut down.

And the same thing will happen when the rogue sites are blocked; people will cease to spend 10 dollars a month on mediafire, and will buy through itunes.

They're not going to stop consuming music simply because they can't get it for free any more. Seriously, you need to get a grip on reality.

So...

It will cost us an additional $10m+/year to help prop up a dying industry so it can give us more unmitigated dreck and treat its customers like criminals while continuing to withhold content and options that we actually want?

Sign me up, I'm stupid and masochistic. I certainly don't want to see that money go towards education or social services.

Cost to the people - $10,000,000.00
Taxes paid by companies this protects - $0.03

This seems like an amazingly fair deal for us.

We get to carry a dinosaur on our backs, have them try to break the internet (I mean they have already broken your TV by disabling features), and make sure they face no competition that often produces superior product with fewer restrictions.

Re: Re: Re:

That's almost a suggestion to tax revenue instead of profit... which would fail companies faster than any internet bill.

Comparing corporate and personal taxes is irrelevant unless you start counting every penny your employer spends on your benefits, office space, work equipment etc to your gross. You would probably be paying around 5% too when real expenses are included.

Re: Re: Re: Re:

Maybe we should tax content producers on revenue instead of "profit".

*digs out and dusts off the Harry Potter - Order of the Phoenix balance sheet*

$612 Million Gross Profit...and it "LOST" $167 Million at the end of the day.
One of the top ten worldwide grosses of all time, and this stinker lost $167 Million.
How the hell could they have afforded to make another one?

Mind you the revenue listed for WB is dated 2007 for 11.7 billion.

I don't have the figures for WB's tax bill for that year, but I am guessing its not huge.

Why would things other than benefits be included in my gross?
They are not my things.
I don't get to take the space set aside for my office if I leave.
I don't get the computer if I leave.
Those are tools required to do the job, owned by the corporation.
They get to depreciate them not me.

What I do know is if I used the accounting practices the studios used, the IRS would audit me in a heartbeat.

And no at the end of the day they still have me in the 15% bracket, but its ok... I make about $1500 more than the poverty line I can afford it.

Easy solution

If they really want the feds to handle all of the cost of Imaginary Property enforcement, then all the feds need to do is create an Imaginary Property tax! Seriously, if they want to have it counted as real property, with the same legal protections, then its value should be added to their taxes too--including all of the back taxes owed for those retroactive extensions as well. Then next year, after they fail to pay up, they should be arrested for tax evasion and have their "property" confiscated.

Re: Easy solution

What a waste. People will always find away around it. Why don't these people get it. Just because you DL something doesn't mean you'd buy it of you couldn't. I'd like to he very clear about this so can understand. Piracy or whatever you want to call it cannot be stopped, EVER! It's impossible!