Andrew Busey: My Musings

 Article from News.com:   Net taxes could arrive by this fall

Yikes.  It’s here again - net tax debates.  The U.S. operates under a federalist system and has a long history of protecting states rights on all sorts of fronts.  However, this model is clearly showing signs of wear and if anything is going to break it, my bet (I wish I could bet) is on the Internet being the cause.  

The guy who thinks the Internet is made of pipes, Alaskan Senator Ted Stevens said he would like:

“to see an impregnable ban on taxes on the Internet.”

Wow!  Well Ted and I finally agree on something relating to the Intarweb… I mean Internet.   I say:  DON’T TAX THE PIPES… or anything flowing through them.

Here is why Internet taxes are bad:

1. They are a huge burden on entrepreneurs.  Some states (like California) are pretty obnoxious about “nexus” which determines if you owe taxes to them or not.  It’s hard to keep track of and easily activated (like a sales person in California…. or possibly even one that visits a lot).  Anyway, collecting sales taxes is an incredible burden and just creates jobs for accountants and a requirement that entrepreneurs buy crap tax accounting software that makes developing cool and interesting applications very difficult.  This whole issue will be more critical as more entrepreneurs develop cool and interesting web businesses.   Whether it’s selling stuff on eBay - a big generator of new small businesses, but when does this qualify for sales taxes? - or a Web 2.0 innovator that has a cool new service that costs a few bucks a month or year for a premium service?  The burden on these business is quite significant.  Amazon and Dell can probably afford the accounting overhead, but not a small business. 
2. If you think state governments are bad, imagine how obnoxious some of these little townships are.  I can’t wait until some backwater town decides to tax the Internet in some stupid way.  You know it will happen.
3. Someone will decide to try tax e-mail or some bullshit like that.  That will be fun.  Let’s have various national, state, county, and city, governments tracking our every Internet activity so they can tax it.  Not to mention the joy someone in that chain will take in knowning what everyone is doing.  I’m sure nothing nefarious could happen…. uhm yeah.

If the bureaucrats who are so effective at wasting all the money we already give them insist on taking more, here are my recommendations:

• Create a national sales tax and redistribute it to the states so at least it will be uniform to collect and pay.  (And if we’re lucky cause a panic and never pass.  Because, just like income tax, once they get their hand in the cookie jar they will never take it out.)
• Only tax companies that do a large amount of business over the Internet.  Like $100mm or more so that the cost of developing systems to manage and pay all these gazillion different taxes (in Texas the sales tax is different in every county…. imagine having to sort that crap out as a small web site.)  

God save us from these jackass like Senator Michael Enzi from Wyoming who wants to mandate taxes on Internet purchases.   I’m glad that the National Governor’s Association is lobbying for this.  BTW, I bet those hypocrites don’t pay the voluntary sales tax now.

The states are collapsing into financial ruin from missing this sales tax so far.  Let them whine some more.  Besides, if they actually get money from some new windfall like this they’ll just waste it anyway.  No, I’m not cynical about government spending.  Not at all.  If only they were run like businesses. 

Oh and while I’m on the subject I love this one: 

“I’ve got to spend this money now or my budget will get reduced next year.”

Way to encourage the right behavior.

/rant

COPA:  Child Online Protection Act

Now I’ve felt for a long time that COPA is yet another example of misguided, stupid legislation coming from Washington.  It’s purpose is noble:  protection children from the Internet.  It’s purpose is also misguided.  How do we protect children from the Internet?  Well, in my opinion, you can’t easily do that at a macro level withouth pretty much breaking the Internet (the web specifically) as we know it.

As an entrepreneur I found COPA particularly annoying becuase it creates a substantial amount of overhead on anyone who is starting a site.  In theory you are supposed to verify someone is over 13 anytime they register.  Really, it is when you “collect personally identifiable information” I think, but since that includes an e-mail address (although everyone who knows the Internet is not made from TUBES knows that e-mail is hardly personally identifiable - any moron can get 100 e-mail address that are not remotely traceabe unless you work for the NSA or FBI).   That’s why all these stupid agreements ask if you are over 13.  Although some lawyers argued that wasn’t enough.

I once got a bill for $10k for COPA compliance work.  WTF.  We ended up ignoring 75% of what the lawyers said anyway because if we had one it no one would have every registered for the site.  So we did mimicked what Google did, which according to our major law firm was not enough.  I’m not going to kill my site because of legalese, but it did worry me a lot.

Thankfully it has been mostly beaten down:  Net porn ban faces another legal setback

I really like news.com but this title really pisses me off.  COPA is a lot more than a porn ban, but I guess that doesn’t make a good headline. 

And NO my site was not a porn site.  COPA messes a lot more crap up than just porn sites.  It basically forces webmasters to maintain all sorts of checks to make sure kids don’t access the site.   Some of them are virtually impossible.   But of course no one in Congress thought this crap might make live difficult on web entrepreneurs.  Do it for the kids!  Keep your kids safe!

I’m not a parent, but I’m going to solve this problem for Congress.  Here is how you keep your kids safe from the Internet:

1. Don’t let them have unsupervised access to the Internet!  (ZOMG, this might require parenting!)
2. Assuming that is that is to inconvenient, install a filter.  You can buy a ton of good filters that will stop your kids from going to almost all inappropriate sites.  (ZOMG, this might cost $50 and require a parent to “install” something on their computer.)
3. Assuming visiting bad sites is only part of the problem, you can also configure your router (which you almost certainly have) so that access to the outside world is only available during certain times.

Wow!  Three easy steps and your kids are safe!

Oh wait, parenting isn’t a requirement.  Soundbites are good.  We must protect the children.  What the hell.  Yet another example of the failure of personal responsibility / accountability in the United States.  Sad.

Anyway, I hope they don’t bring this albatross back.

/rant

Red 5 Studios announced they have closed $18.5 million in funding from Benchmark Capital and Sierra Ventures.   Mark Kern was team lead on World of Warcraft.  I wish him and his team the best of luck on their new game!

They are using the Project Offset engine, which if you haven’t seen it yet - you really should.  It looks amazing and the videos are really impressive.

Pluck, where I was a co-founder, just announced that they’ve raised $7mm from Reuters.  Reuters will also offer BlogBurst on its site and to its partners. Congrats to the team, they are doing an amazing job!