I'm in the UK. Simply owning land does not incur taxes here, we don't have land value taxes. You pay capital gains tax on profits selling land. There are annual taxes on buildings such as council taxes on houses, specifically to pay for municipal services, but not generally on land.
If I make goods I'm not taxed for owning them, only if I earn income from the sale or use of those goods.
And I think that makes sense because residences impose costs on local services. However if I write a novel aged put it on my bookshelf, or if I paint a picture ad put it on my wall, I’m not imposing a cost on anyone just because these might have some theoretical value. How would their value even be measured?
IP is next to impossible to appraise, unlike land.
It’s pretty easy to ballpark what a lot of house or office building is worth based on comparables that sold recently. IP doesn’t sell that much and comparisons are harder.
Copyright is easy to appraise. Estimate the stream of payments it will generate; take the net present value using an appropriate estimate of a safe interest rate.
Will it always match the actual value? No, of course not. Sometimes popularity changes a lot, or interest rates change a lot.
I'm not sure you really need a proprerty tax on copyrights though. They generate taxable income until they expire. It seems more fair to tax the actual income rather than appraised value, to avoid problems from cases where the appraisal is too high or too low.
So of I write a novel and never publish it, how should its value be calculated?
If what matters is actually revenue, well, revenue is already taxed when it’s incurred. Suppose there is no future revenue, do I get the tax back eventually?
If you never publish it, and it's never published after your death; objectively it produced no income and has a monetary value of $0.
With no offense to you or your novel; I would appraise an unpublished novel by an unknown author at something like $100, which might be too high. Some turn out to be worth much more, but most will be produce $0 or less for the author's estate.
How is that tax going to be assessed and by who? What constitutes a novel or a book over a set of well written notes? This whole idea is ludicrous, are we going to raid people's homes and audit their computers and notebooks to see if they've written anything that might be valuable? Just tax their income. We already do it.
McDonald's trademark is not a copyright, so that's a different process. The trademark is appraisable too, but it's trickier because trademark doesn't expire and the stream of payments may not end. You can look at the history of franchise payments as one measure, and consumer revenues as another measure, but you'll need to discount for the actual product. The corporation broadly accounts for the value of the trademark and other things in Goodwill on the balance sheet.
For a copyrighted work, you would examine the work, find similar works, what were the stream of payments for similar works. Take into account age of the work, the artist's other works, etc.
McDonald's does hold copyright in many things. But many of those are unlikely to produce significant income; training videos, promotional materials, etc don't tend to sell for much if at all.
If you needed to appraise a new song by a popular artist, you could do a reasonable job by looking at the stream of payments generated by their average song, and projecting future payments based on the general trends of payments for songs over time. You might also consider current popularity of the artist/song and how that impacts longevity; songs don't acheive many sales initially often hit zero sales and never come back, whereas songs that chart tend to have continued, if meager, sales for a long time.
Trademarks are IP; I thought we were taking about a generalized IP tax.
But, ok, copyright.
Who exactly is going to do these audits, find comparable works, etc? For every single copyright (500,000-ish registered in the US per year, far more unregistered but real copyrights)?
And you’d need to audit all existing copyrights… that song may have produced very little revenue, but then a big artist covers it, and the composition rights (but not performance rights) are suddenly worth a lot more.
It all seems like an exercise in applying engineering to law, which never goes well.
That's a dumb system as it doesn't account for the fact that a piece of property's value can change over time. You write a book, you have to declare its value prior to knowing it's value to consumers. If you aren't independently wealthy already you will never be able to become wealthy by writing books, paintings, songs, etc. as you will have to declare their value quite low in order to pay taxes on them. If it becomes popular the publishing company comes along and forcibly buys it from you for the low value you had to put on it because you couldn't pay the tax, then raises it's value far beyond what the author could afford and profits from the movies rights and etc.
The effect of a Harberger tax on intellectual property would probably be an upwards transfer of ownership of intellectual property, from people who can't afford to pay taxes on whatever those 100,000x more wealthy are willing to pay.
A Harberger tax might work well in economist-land, where any discrepancy between what wealth I could extract from my property and what wealth I actually extract from it represents an inefficiency that can be addressed by a transfer of ownership at market value at no inconvenience to the original owner. In reality, there are many other reasons than market value that I might hold onto intellectual property.
I think so, yes, or you could place the copyright in the public domain.
Your current situation is a prime example of the failure of current copyrights. You aren't incentivised to produce any new art, it was unearned as you weren't the author, and yet still the state enforces the copyright for you.
It's a solution to the problem raised by the GP - how to fairly value IP.
This whole thread is about how many countries with land taxes don't similarly tax other assets like IP. Whether you think it's fair or not is another question - the blocker isn't fair valuation.
capital gains does not happen on sale of land generally.
These two things are obviously taxed differently because it is to the value of the government to do so, and the value of the government is supposed in many countries to somehow translate into a value for society.
Profits from property sales are often tax as CGT. It's only a select few jurisdictions that don't tax property sales, often with both CGTs and stamp duties.
The difference in how their taxed in the US is certainly not standard globally, nor is it likely to be optimal.
Real property is taxed, but often you do not pay capital gains on sold real property (this "often" of course varies by jurisdiction, so yes in lots of places you may pay some if the conditions are right), when selling intellectual property you often (same proviso as before, only inverted) pay capital gains.
Real property is sometimes taxed. Certain uses/users are partially exempt from taxation, and some uses/users are entirely exempt. It is not legal to rob these properties, nor should it be.
If I make goods I'm not taxed for owning them, only if I earn income from the sale or use of those goods.