December 2003 - cypherpunks-legacy

Bit tax again?
by jim bell 17 Dec '03

17 Dec '03

I hesitate to write about this, but the old "bit tax" idea has surfaced again, this time reported in Electronic Engineering Times, page 1, April 29, 1996 issue. I include the article below. My comments will follow in another note shortly! Europe: Try to send it, we'll tax your bits By Peter Clarke Brussels, Belgium-- A report prepared for the European Commission (EC) urges it to consider levying a "bit tax" on information sent over the Internet and other networks. The recommendation runs counter to the reining sentiment among U.S. regulators, who have sought to avoid being cast as "bit cops." The EC report reasons that the value of the average cyberspace transaction will increase as time goes by, resulting in fewer physical transactions. The upshot, the report says, will be a shrinking government tax base. Evidence of such a trend may already have surfaced: Use fo the Internet to import goods and services electronically from outside the continent has allowed some Europeans to avoid payments under Europe's value-added-tax (VAT) system. Luc Soete--director of the Maastricht Economic Research Institute on Innovation and Technology (Limburg, Netherlands) and chairman of the high Level Expert Group (HLEG) that prepared the report on the social aspects of the information society--has examples at the read to prove the potential of Internet commerce to erode the tax base. Soete observed last week that sending his group's report by mail or courier, rather than electronically, would involve taxes on fuel purchases and on the profits fo the companies involved in physically shuttling the document to recipients. "As society moves toward the information society, tax revenue needs to shift emphasis from material goods to virtual goods and services," he said. I think we will see a very rapid introduction [of such a tax structure] in one or two years' time." Soete said he believes the tax "can be introduced in a very straightforward way. Every telephone operator and service provider has a record of the bytes moved. They can be the tax collectors." He acknowledged the prevailing "negative view about a bit tax" and attributed it in part of "concern that it could inhibit adoption of information technology. But once people have the technology, not many would go back. Whether the tax is 1 cent per bit or 1 cent per kbit is, of course, completely open." At the same time, U.S. regulators, who hope to expand Internet access to schools, libraries and low-income individuals, have resisted efforts to cast them in the role of bit cops charged with monitoring Internet traffic. Free Internet The Federal Communications Commission, which has conducted a series of highly profitable spectrum auctions for wireless and satellite services, last week proposed reserving some wireless spectrum for free Internet access for schools and libraries. Soete last week cast the bit tax as a progressive levy that would fall hardest on big business and that would not deter private individuals from joining the information society. Indeed, the potential of the information revolution to further polarize society is among the concerns expressed in the report. Soete believes the bit-tax should be used to fund social security or welfare. "Labor can no longer be the source of revenue for social security," he said. Steve Kennedy, business-development manager at the Internet service provider Demon Internet Ltd. (London) doesn't share Soete's positive view of the bit tax. "Such a tax would be very difficult to monitor and police," Kennedy asserted. "We transfer about 1.5 Gbytes of data a day, but we don't keep a lot of customer information. Who's going to pay for the equipment and software to log all this?" He added that if his company was "simply taxed on the data transfer, we would have to pass it on to the customers, and that would penalize the small user." The HLEG report is lavelled as an interim document that is intended to generate public comment. The final report will be published by year's end. The interim report can be accessed from http://www.ispo.cec.be/hleg/hleg.htmlJim Bell jimbell(a)pacifier.com

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PGP API & PGP 3.0
by Jean-Paul Kroepfli 17 Dec '03

17 Dec '03

I'm considering the use of PGP for bank operation in central Europe (and yes, also in France, but there -normaly- only for interbank fund transfers). I have seen the PGP API stuff, but I don't know where and I haven't seen any commentaries by users. I don't know the current state of the PGP 3.0 effort and the intermediate results, nor the respective relation of PGP API and PGP 3.0 (which has also an API). Thanks for your advice, Jean-Paul ~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~- Jean-Paul et Micheline Kroepfli (our son: Nicolas and daughter: Celine) eMail: JeanPaul.Kroepfli(a)utopia.fnet.fr Also Compuserve and MSNetwork Phone: +33 81 55 52 59 (F) PostMail: F-25640 Breconchaux (France) or: +41 21 843 27 36 (CH) or: CP 138, CH-1337 Vallorbe Fax: +33 81 55 52 62 (Switzerland) Zephyr(r) : InterNet, Communication, Security and Cryptography consulting PGP Fingerprint : 19 FB 67 EA 20 70 53 89 AF B2 5C 7F 02 1F CA 8F "The InterNet is the most open standard since air for breathing"

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Dole Backs Crypto Export
by jya＠pipeline.com 17 Dec '03

17 Dec '03

Financial Times, May 3, 1996, p. 7. Dole backs removal of software export ban By Louise Kehoe in San Francisco Senator Bob Dole, the presumptive Republican presidential candidate, yesterday threw his support behind proposed legislation to remove US export restrictions on computer software used to encode Internet messages. The new Security and Freedom through Encryption bill introduced yesterday by several Republican senators and congressmen, also rejects a controversial Clinton administration proposal to enable law enforcement agencies to unlock encoded electronic messages. For Senator Dole, the encryption bill provides an opportunity to seek support from Silicon Valley high-tech leaders many of whom backed Mr Bill Clinton in 1992, and to boost his election campaign efforts in California. "The administration's misguided proposal on encryption amounts to a pair of cement shoes for Silicon Valley," said Senator Dole. "It seems to me that a new pair of track shoes might be a better answer. The administration's big brother proposal will literally destroy America's computer industry," he said. Encryption software is currently classified as "munitions" and exports are strictly limited by the US state department. US and other western intelligence and law enforcement agencies are opposed to the commercial use of the most powerful encryption methods which they argue could be used to mask criminal or terrorist activities by effectively preventing wire-taps. However, US software companies maintain that the current export restrictions threaten US pre-eminence in the world software market. A study by the Computer Systems Policy Project, a computer industry group, estimated that within four years the US economy would lose $60bn in revenues and roughly 216,000 jobs as a result of encryption export controls. Moreover, current regulations, which allow export only of "weak" encryption, are unacceptable because such encoding has been demonstrated to be ineffective. Last year, for example students in France were able to break encryption which is used in the export version of Netscape Communication's popular Internet browser software. The limited availability of strong encryption software is also blocking the progress of electronic commerce on the Internet, US computer experts argue, because companies and individuals are reluctant to make electronic payments over the Internet without assurance of security. -----

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Re: CryptoAnarchy: What's wrong with this picture?
by liberty＠gate.net 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- [I must *try* to quit rising to all this bloody bait, but:] Michael Loomis wrote: >[..."unfairness is kept within reasonable bounds"..."reasonable > sized government"...] I'm sure that we all agree on the meaning of the term, "reasonable." >Consumption taxation would, of course, >include a tax on the amount of information coming into your computer. I >don't think that the government will have any problem determining the >quantity of the information & since it will be encrypted anyway, I don't >see the privacy worries. This would give a whole new meaning to the term "mailbomb," no? JMR Regards, Jim Ray <liberty(a)gate.net> "The FAA, FBI, Customs, CIA, Justice, DEA and the IRS were all involved in Mena. They won't say how they were involved, but they will tell you there is nothing there." -- Bill Plante, CBS News Correspondent, & Michael Singer, Producer, CBS News, New York. in Tuesday, May 3, 1994's Wall Street Journal letters to the editor section. _______________________________________________________________________ PGP key Fingerprint 51 5D A2 C3 92 2C 56 BE 53 2D 9C A1 B3 50 C9 C8 Public Key id. # E9BD6D35 -- http://www.shopmiami.com/prs/jimray _______________________________________________________________________ -----BEGIN PGP SIGNATURE----- Version: 2.6.2 Comment: Freedom isn't Freeh. iQCVAwUBMYoTt21lp8bpvW01AQE4WQP+KQyztz4V6jfYvboOrDhLLuItlTzkLmIv 6TfM3/7O+fLoNcyKXGOEmgc5y7j0/IiiXJJtMsDCsfH/ONpyEAY1GRnfREgMv9HW OezSVVhYd/xoKg6pouAaWgZ2cD3RlH8SeE7LqCkeZhAXdcXHiNIAK8mAv78Eln0y KjzImXWG9dw= =ieam -----END PGP SIGNATURE-----

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Bit tax again?
by jim bell 17 Dec '03

17 Dec '03

>Europe: Try to send it, we'll tax your bits > >By Peter Clarke >The EC report reasons that the value of the average cyberspace transaction >will increase as time goes by, resulting in fewer physical transactions. >The upshot, the report says, will be a shrinking government tax base. >Evidence of such a trend may already have surfaced: Use fo the Internet to >import goods and services electronically from outside the continent has >allowed some Europeans to avoid payments under Europe's value-added-tax >(VAT) system. This is a poor reason to adopt a so-called "bit tax." One obvious problem is that a 1-kilobyte letter in which I order thousands of dollars worth of goods is simply not comparable (in "value") to a 1-megabyte telephone conversation (the amount of data transferred, in one direction, in a 2-minute phone call.) If they want to implement a "bit tax" to replace lost revenue, they're left with either taxing bits so high that they recoup the "lost" revenue in the 1-kbyte letter, or reducing the "bit tax" to the level which makes transmission of low-profit items like Internet phone calls, GIFs, or audio files possible. The former won't do any good; the latter is totally unacceptable. Governments may be worried about losing tax revenue, in general, but they are (as usual) FOS. The development of information technology may reduce tax revenues, but if it does, it does this by bypassing the use of services that would have otherwise been necessary. To use the example in the article, if I buy something over the Internet, as opposed to physically driving 20 miles to get it, and it is (efficiently) shipped to me by some method such as UPS, that represents a substantial reduction in the amount of gas I use, the wear and tear on my car, usage of roads, etc. _IF_ taxes exist to pay for some of these kinds of costs, _if_ a more efficient system of product-ordering is developed to eliminate these costs, then (logically) the need for those services is reduced. That means that taxes should drop accordingly. > Soete observed last week that >sending his group's report by mail or courier, rather than electronically, >would involve taxes on fuel purchases and on the profits fo the companies >involved in physically shuttling the document to recipients. Soete proves my point. There is a decreasing need for those delivery services, now, so it is logical that costs should be reduced proportionately, including taxes. However, if we look at the situation by pessimistically assuming that the government wants to maintain its revenue no matter what, it's obvious that Soete's position is "logical" from his limited standpoint. The problem is that carried to its ultimate extreme, if technology completely eliminated the need for the services that governments currently provide, those same governments would still want the same amount of revenue! This kind of thinking only makes sense to governement employees. >"As society moves toward the information society, tax revenue needs to shift >emphasis from material goods to virtual goods and services," he said. I >think we will see a very rapid introduction [of such a tax structure] in one >or two years' time." This quote seems to assume that tax revenues should be just about as constant and unavoidable as death and...uh...taxes. I would sure like to see some hint of recognition that tax revenues SHOULD fall as a consequence of technological progress. >Soete said he believes the tax "can be introduced in a very straightforward >way. Every telephone operator and service provider has a record of the >bytes moved. They can be the tax collectors." This is probably the most outrageous and hilarious thing he is saying. If anything, practically no software today has any ability to collect the kind of information he thinks is already being collected. > >He acknowledged the prevailing "negative view about a bit tax" and >attributed it in part of "concern that it could inhibit adoption of >information technology. That's a straw man. What a "bit tax" would do is to skew the market in favor of "low-bit" services, and against high ones. Sending a GIF or an audio file would become cost-prohibitive, while email would stay cheap. While, arguably, there are reasons to charge more for more bits (more transmission capacity is necessary), the amount of that extra charge would probably be exceedingly small if it were "fair." > But once people have the technology, not many >would go back. Whether the tax is 1 cent per bit or 1 cent per kbit is, of >course, completely open." He completely misunderstands the inability of the system to know the "value" of a given transmitted bit, and without this information the only system left is a flat tax-per-bit which would be entirely impractical. >Soete last week cast the bit tax as a progressive levy that would fall >hardest on big business and that would not deter private individuals from >joining the information society. This is bullshit. He's just trying to sucker the great unwashed into believing that taxing the Internet is a way to make the other guy pay the toll. It won't work. >Soete believes the bit-tax should be used to fund social security or >welfare. Not a prayer! He's trying to get the geezers to look upon the Internet as a cash cow. Jim Bell jimbell(a)pacifier.com

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Re: Burns Bill
by jseiger＠cdt.org 17 Dec '03

17 Dec '03

Bill Frantz writes: > A quick read thru the text of the bill (via http://www.cdt.org/crypto/) > shows none of the principle objectionable features of the Lehey bill. > (Standards for key escrow agents, and additional criminal penalties for > using encryption to hinder an investigation.) > > This bill has some obscure, to me, exceptions. The most troubling of which > I think means (IANAL) that export can be restricted if there is a > reasonable expectation that the hard/software will be reexported to one of > the countries on the extreme bad boys list. I will point out that as things stand under U.S. law you aren't even allowed to export toilet paper if the expectation is that the ultimate customer is on the extreme bad boys list. Although as a libertarian I find any such provision distasteful I cannot see that we are badly off if the rules for exporting crypto and exporting toilet paper are roughtly similar. > in any case, it is not clear how passage of the bill could possibly > make things worse. I think that is key. Perry * PROTECT THE INTERNET AND THE FUTURE OF FREE SPEECH IN THE INFORMATION AGE * Join the legal challenge against the Communications Decency Act! For More Information, Visit the CIEC Web Page http://www.cdt.org/ciec/ or email <ciec-info(a)cdt.org> -- Jonah Seiger, Policy Analyst Center for Democracy and Technology <jseiger(a)cdt.org> 1634 Eye Street NW, Suite 1100 Washington, DC 20006 (v) +1.202.637.9800 PGP Key via finger (f) +1.202.637.0968 http://www.cdt.org/ http://www.cdt.org/homes/jseiger/

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Re: CryptoAnarchy: What's wrong with this picture?
by jamesd＠echeque.com 17 Dec '03

17 Dec '03

At 07:05 AM 5/3/96 -0400, Michael Loomis wrote: >No tax system will ever been perfect, but income taxation is a good >system of taxation. Income taxation inevitably requires some accounting >costs, but these costs should be going down with advances in computing >technology and other technology. The income tax necessarily violates privacy in ways that were thought outrageous a few when it was first introduced. There were numerous cartoons on the subject, but people accepted it because only the rights of a tiny handful of very rich people were going to to be violated. (I hear the same argument all the time on the privacy list, where lots of people want the government to have root access to the computers of the evil capitalist overlords in order that the government can protect their privacy.) As our capacity to protect our privacy and still engage in complex extended transactions improves, I expect that once again the income tax will come to be seen as an intolerable and utterly unacceptable violation of peoples rights and future generations will be amazed at our ignorant barbarity. --------------------------------------------------------------------- | We have the right to defend ourselves | http://www.jim.com/jamesd/ and our property, because of the kind | of animals that we are. True law | James A. Donald derives from this right, not from the | arbitrary power of the state. | jamesd(a)echeque.com

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Here is some E-Commerce Info.
by Joseph M. Reagle Jr. 17 Dec '03

17 Dec '03

At 11:47 PM 5/2/96 EDT, Sally D. McMillan wrote: >I am writing a paper on electronic commerce, and I wonder if anyone happens to >know of interesting URLs addressing the subject, including security issues? >If you know of a good location for electronic commerce/security information, >please email me directly >at the following address: >103007.3426(a)compuserve.com >THANKS A LOT!! Sally Tons of it on every topic: http://ccs.mit.edu/15967/groups.html _______________________ Regards, Men govern nothing with more difficulty than their tongues, and can moderate their desires more than their words. -Spinoza Joseph Reagle http://farnsworth.mit.edu/~reagle/home.html reagle(a)mit.edu E0 D5 B2 05 B6 12 DA 65 BE 4D E3 C1 6A 66 25 4E

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Re: Why I dislike Java. (was Re: "Scruffies" vs. "Neats")
by E. ALLEN SMITH 17 Dec '03

17 Dec '03

From: "Perry E. Metzger" <perry(a)piermont.com> >It certainly makes me feel more comfortable. The problem I have is >that I expect that increasingly pages will arise for which information >can only be extracted with the use of Java. Some flunky from some desk >will will come up and scream "what do you mean I can't get a copy of >Foo Corporation's merger press release because we won't run some >program! Thats bullshit! Do you know how much money the risk arb desk >pulls in, you twit! This must never happen again! Fix it immediately!" Might I suggest setting up another computer with Java enabled, and _without_ the critical applications? Somehow, I think they can afford an extra computer for each desk - it wouldn't have to be a high-capability one. That would also cure having to have Netscape and other high-network-access programs on the same computers as the critical applications. (Of course, some of the critical applications may also need to access the Internet... but they probably wouldn't need http capability.) Of course, feel free to tell me that I don't know what I'm talking about. -Allen

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Re: CryptoAnarchy: What's wrong with this picture?
by brerrabbit＠alpha.c2.org 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- Sandy Sandfort <sandfort(a)crl.com> wrote: >A couple of generations ago, only multinationals and the super >rich could avail themselves of offshore banks, asset protection >trust, foreign incorporation, etc. Fifteen years ago, I was >helping members of the upper middle class do the same think. > >Today, virtually anyone on this list can afford these techniques. >Non-US people have been using them for years. The reason middle >class Americans aren't savvy that yet are ignorance and inertia. >Everyday, Americans are becoming less parochial (due in part, >ironically, to government hysteria about money laundering) about >such possibilities. As the Clintons and Doles turn up the tax >and regulatory heat, they will also overcome their inertia. Do tell. How would someone, just for instance, who is considering leaving a "permanent" job for the higher compensation available to contractors and consultants be able to structure a business in such a way as to benefit from these techniques? If we assume a rate of between $60/hour and $125/hour (typical in Boston, New York, and the Silicon Valley), how much can one save? How much effort and money is required? How much risk is involved? There are many books on the shelves claiming to show how to avoid taxes using these techniques. Most of them have the smell of "dangerous crackpot" about them. Can you recommend any in particular? If this is too far off topic for cypherpunks I'd be interested in learning of a more appropriate forum. -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQCVAwUBMYpJ68NGLex6dhF9AQHKLgQAh2/j23rG3RP0VFNVcsNIUphgWjTG0mlE ojXWJ29el616YCfKHpwXzT2v9+wThdQByp047qf8zXGqsjuf5ld2rkWxgap840JH S4Wf1GkxdcCFM9Vq3Ks955YtWdWIz4PrngxEpPU6lmXTIY2Vk17HTRJoZBKJLwW0 iAPchDVd+kg= =7bKv -----END PGP SIGNATURE-----

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