French Lurve Taxing New Industries

[Dreadnaught]

So a new industry rolls up into town: online advertising. It's growing fast, employing people and introducing dynamism into a stodgy business.

BUT, one of the major players in the space is a foreign -- mais non, aussi American -- company. So let's introduce a special tax, and then divert the funds to our friends in the media?

Welcome to crony capitalism. I wish we had a French cohort here, I'm curious what it feels like to know that every time I view a Web page my view is being doubled-taxed to the advertiser on the page.

France to launch le Google tax

Online ads must cough up to Sarkozy
24 Nov 2010 10:02 | by John W. Daly in Münster


The French senate has decided it will levy a tax of one percent on online ads starting next year, as stated in the budget 2011.
Philippe Marini, head of the finance commission, was quoted as saying that online ads aren't taxed yet and the main sellers of ad space were located outside of France, meaning they don't pay enough taxes to La Grande Nation.

French advertisers weren't so happy, saying the nefarious one percent tax will have a negative impact on the country's economy, as French companies will advertise and thus sell less.

Common sense implies companies that spend a million or two on advertising won't trash an entire campaign because a few ads in the net will cost advertisers.
The idea of a "Google-taxe" has been making its rounds since early this year, after the so-called Zelnik Report appeared on the political scene. Its author, Patrick Zelnik, stated it would be a brilliant idea to tax online ads and use the income to subsidise French newspapers, which are lying in bed with a slight fever due to that US flu called the internet.

Patrick Zelnik also happens to be the boss of Carla Bruni's record label. France's president Nicholas Sarkozy happens to be married to Carla Bruni.
France passed the Hadopi law stating people who download content illegally will be warned three times before having the connection to le net is severed. Anyone smell political self-dealing?

http://www.techeye.net/internet/fran...-le-google-tax

[Lewkowski]

Well honestly what can you expect from the French? Surrendering cheese eating socialist dictator enabling punks. And those are their conservative politicians...

[Loki]

I wonder if those are sufficient grounds to take this to the WTO (not that I expect to see it happen).

[Hazir]

I wonder if those are sufficient grounds to take this to the WTO (not that I expect to see it happen).

Why ? The article is rather thin on the ground on facts. The fact that the author is defending piracy makes it more than a bit suspect in the field of objectivity to start with. But even if it were true; what exactly is anti-american about taxing economic activities?

[RandBlade]

I wonder if those are sufficient grounds to take this to the WTO (not that I expect to see it happen).

For introducing a universal tax? Doubt it.

I'm surprised there's no VAT on online ads.

[earthJoker]

I'm surprised there's no VAT on online ads.

Me too.

[wiggin]

What's the 'value added' of an ad, anyways?

I don't get it - Google's corporate profits are taxed in countries where they have a presence (France included, I assume) - so aren't they getting a chunk of this revenue already? Why add a special tax on top of that?

[Loki]

Why ? The article is rather thin on the ground on facts. The fact that the author is defending piracy makes it more than a bit suspect in the field of objectivity to start with. But even if it were true; what exactly is anti-american about taxing economic activities?

For making a public statement saying that the main reason for the tax is to target a foreign corporation.

[LittleFuzzy]

For making a public statement saying that the main reason for the tax is to target a foreign corporation.

Offending your sensibilities does not violate any WTO rule.

[Loki]

Offending your sensibilities does not violate any WTO rule.

You mean explicitly targeting foreign corporations isn't against the rules?

[Being]

You mean explicitly targeting foreign corporations isn't against the rules?

Is it against the rules to give foreign corporations tax breaks?

[RandBlade]

What's the 'value added' of an ad, anyways?

It's a service

For making a public statement saying that the main reason for the tax is to target a foreign corporation.

It would only be against WTO rules surely if it excluded French business, so long as it targets all its legal regardless of taste.

[earthJoker]

What's the 'value added' of an ad, anyways?

You could ask the same for any service.

[Loki]

It would only be against WTO rules surely if it excluded French business, so long as it targets all its legal regardless of taste.

Not necessarily. The WTO recognizes non-direct barriers. Say if America knows that 95% of cheese is manufactured in France and then imposes a tax on all cheese with the intention of taking money from French companies, it would be irrelevant that 5% of the targets are American. Governments usually argue that the reason for the tax is entirely fiscal (i.e. they just need more tax revenue). That point would be hard to make when the French minister admitted that it's being passed to target foreign corporations.

[RandBlade]

According to a badly written article that doesn't have a quote from the minister.

[Loki]

http://www.google.com/hostednews/afp...jeANIMjDHK_Dig

Pretty clear evidence of France invoking cultural nationalism. Far from the first time too.

[LittleFuzzy]

You mean explicitly targeting foreign corporations isn't against the rules?

Rhetoric is not legislation. Their legislation *their real actions, the issues that actually come up with the WTO* do not explicitly target foreign corporations, they explicitly target all corporations. Which is fair process. Your heart does not need to be pure to any economic principles to keep from running afoul of the WTO Loki. Your heart can feel anything it wishes, so long as your actions don't violate trade rules. Yeah, there can be non-direct barriers. This isn't one.

[Loki]

Rhetoric is not legislation. Their legislation *their real actions, the issues that actually come up with the WTO* do not explicitly target foreign corporations, they explicitly target all corporations. Which is fair process. Your heart does not need to be pure to any economic principles to keep from running afoul of the WTO Loki. Your heart can feel anything it wishes, so long as your actions don't violate trade rules. Yeah, there can be non-direct barriers. This isn't one.

If you read my cheese example, you'll see that one can target "all corporations" while really targeting foreigners (i.e. the same way that many "environmental and health" regulations have been shown to be non-tariff barriers by the WTO). The WTO isn't that stupid.

[Hazir]

Why should he have read your cheese example? It was silly and had no bearing on the issue. The issue of taxation of the internet is one that pre-occupies all governments everywhere.

[RandBlade]

Loki, please demonstrate any equivalent case where the WTO has found against what the French are doing ...

[earthJoker]

I think cheese isn't appreciated enough in this forum

[Being]

I think cheese isn't appreciated enough in this forum

Not Swiss Cheese anyways.

[earthJoker]

The best Swiss Cheese is Gruyere and probably you never had that, they always sell Emmentaler as Swiss Cheese http://en.wikipedia.org/wiki/Emmental_%28cheese%29

[Being]

The best Swiss Cheese is Gruyere and probably you never had that, they always sell Emmentaler as Swiss Cheese http://en.wikipedia.org/wiki/Emmental_%28cheese%29

Yes, my Swiss Cheese has holes in it so it is probably Emmentaler. Is there a big difference in taste?

[earthJoker]

Yeah, Gruyere has a much stronger flavour, especially the old ones. And obviously no holes.

http://en.wikipedia.org/wiki/Gruy%C3%A8re_%28cheese%29

[RandBlade]

It's not Swiss Cheese if it doesn't have holes in it

[earthJoker]

It's not Emmentaler if it doesn't have holes in it

Corrected.

[RandBlade]

I stand by what I said.

[earthJoker]

Die infidel!

[Khendraja'aro]

Hei, if you ask an American what Germany looks like, they always come up with something that crudely resembles Bavaria. So I feel your pain.