Thursday 6 December 2012

Working in Montréal today --tax the bastards!

Good morning folks,

I will be working in Montréal today, and a heads up -next week I will be in Ottawa on Wednesday instead of Thursday as I will be taking Thursday and Friday to help my grandson Ethan celebrate his 1st birthday!

Ever hear of a movie named Recoil?  I hadn't before last week.  What I also don't known is what the movie is valued at.  But I do know that the owners of the film pay no continuing taxes on the simple ownership of it.  You may think to yourself, "That seems fair, I don't pay continuing taxes on the simple ownership of my sofa either."

I live in Mississauga.  I pay property tax in Mississauga. 24% of my property tax pays for education, I'm good with that, an educated population benefits us all.  And around 18% of my property tax pays for police services.  I'm also good with that.  I have property, the city taxes me, and they provide some muscle to protect my real property and the people that may live in it, and the articles that I may store in it.

That's the way police services are suppose to work.  The more real property that exists to tax, this includes houses, apartment buildings, office buildings, shops, car dealers, theatres, and donut shops.  More of those, and you have more cops.  Less and you have less.  That's why out where Don lives in a rural area, there just are not many cops driving around trying to figure out where to buy a donut.  Like cops, donut shops exist where the people are.

Now just in case you missed it, above I also included protection of the articles that I may store at my real property.  But what if my articles had no substance, took no space, and I could store an infinite number of these articles in my garage?


Yeah, work with me here.  I think I pay around $4.5k annually in property tax, so around $820 a year available for my local police department to give me assistance.  It is Sharlene and I living in the house, have a few-three cars, a couple bicycles, too many TVs that can be justified, a pool, some furniture and a cute dog that Dennis claims is too small to be a dog.  $820 is a pretty good deal for the commensurate level of protection.

I called the police the other evening to come to one of my neighbours' house and two cops showed up with two cruisers within a few minutes, and remedied my particular concern.  Good job.

But what if I was running a movie distribution business out of my house, and had $4 billion in Intellectual Property on a few hard drives?  That would be fairly easy to do, IP takes no real space, occupies no real property.   What if I published that IP where any and all persons could see it, hear it, and make copies?

And I wanted the cops to stop them? Whining that my delivery mechanism doesn't stop people from watching without paying me, would my $820 go very far? No, it wouldn't, if the cops helped me, they would use up $ that came from my neighbours, and their neighbours and also from you.

You probably see where this is going and you may be formulating an argument that if I am successful with my film business, I will make a profit and need to pay taxes on that profit.  Sure, but two flaws with that. Property taxes pay for cops, not income tax.  Second, have you ever heard of a film making a profit?  Never happens, that's why actors negotiate on the box office sales, not the profit after expenses, and why should the legitimate protection of property be tied to the profitability?  The city is not burdened with proving that I can make a profit on my house, rather they declare a value and tax me. Period.

We have moved copyright enforcement to our criminal courts and police.  Now we have cops that need to worry about protecting Louis Vuitton's design and Lucas Film's images of C3PO, but we don't tax these things as real property and while the Vuitton office is in a building that does have property tax, that building is filled with desks computers and sofas that also need police protection, effectively 'using up' the protection associated with the building's property tax --moreover, that property tax doesn't make its way to Mayor Hazel's finest.

Let's change the tune here, let's tax IP as real property.  If we don't, then your taxes will need to increase in order to pay for the police to protect interests of those that quite frankly already are much more wealthy than you or I.  Either that or watch the police protection of your property diminish, your real property, your family, your articles will suffer.

Let's go back to the film Recoil, what is it worth?  I really have no idea, did a quick search before the flight took off but could not come up with a formula, and this captain just stated that we have started our descent into YUL, do we look at its revenue potential, what it cost to make.. ? Lets say it's worth $1,000,000 (it was a made-for-video movie after all), let's tax it as real property, if the owners would like to cough up 1-5% for each film that they have, each and every year, in every jurisdiction that they seek protection, a 1% property tax on all IP, 1% on the value of Louis Vuitton's purse designs, 1% of the value of Sony's music collection to Canadian authorities, I would be happy to provide a commensurate level of policing for them.

Yes EACH,ALL movies that they have (unless they release it to the public domain), we don't get to pick and choose to pay tax on real property, can't tell city hall, no don't tax that house, I promise not to call the cops.  How about our gov't consider that instead of asking you the tax paying citizens to provide the protection?

Have a good day.