Open Source R&D Tax Credit? 196
Dan writes "The Center for American Progress is proposing an R&D tax credit for open source development." From the article: "Subsidizing open source software development can also be justified on grounds of economic efficiency. Open source software development enhances the ability of other developers to create new products. It also enhances the development and dissemination of knowledge and ideas more broadly. Since the benefits to the broader software development community and the economy as a whole go well beyond the users of an individual software product, a policy that subsidizes open source development would increase economic efficiency."
Built In Tax Break (Score:5, Funny)
Re:Built In Tax Break (Score:4, Insightful)
That having been said, there are a lot of issues with such a tax break. For example, what are the qualification criteria? Significant contribution? Lead developer? Credited developer? Also, what are the criteria for something to constitute as OSS? Non-viral licensing? Compiled/interpreted language? What about markup languages? Or things that are not code but are released under a creative commons license? What about patented methods where the patent holder is also the lead developer? Finally, while slightly easier to define than the above since there are already precedents set, what constitutes development costs?
Re:Built In Tax Break (Score:3, Insightful)
I think you just described the question which is the whole reason for copyright. Nobody knows how useful any creative work is. It can only be measured by demand. And demand is hard to measure without artificially limitng the supply. F/OSS software does not artificially limit the supply at all, so it's very hard to tell the difference between a novel program, and a worthless pile of code that was just developed to get the tax credit.
You can see similar problem
Re:Built In Tax Break (Score:2)
Looks like they are aiming at limiting it to actual expenses, which does help a little in reining in the more obvious abuses. So you could claim hosting expenses for example, so long as all of the expense was your Open project. A site that also had personal stuff would could an accounting nightmare. You could claim travel expenses to a conference. If it happened to be in Orlando and you also go see Mickey while you are there... well current business
Re:Built In Tax Break (Score:2, Insightful)
public static void main(String[]args){
System.out.pritnln("My contribution to OSS");
}
}
I'releasing this code under GPL. Can I have my tax break?
Re:Built In Tax Break (Score:2)
IOW, a $500 deduction will eliminate your tax liability on $500 of income, but a $500 credit will result in a $500 check drawn on the treasury if you have no income.
(I'm against all tax credits, as they form a back-door entitlement.)
-Peter
Re:MOD PARENT DOWN (Score:2)
Funny though that it got moderated up as Informative...
Barter vs. Volunteer (Score:2)
Its been thought of (Score:5, Informative)
Notice Al Gore was VP when this proposal was made.
You can already get tax breaks (Score:2)
If Clinton could claim for the used underpants he gave away, why should programmers not get a break too?
Center for American Progress (Score:3, Funny)
Center for American Progress
Where is the center of American progress? The president says the front of it is in Baghdad.
Re:Center for American Progress (Score:5, Funny)
Re:Center for American Progress (Score:2)
Well, I never drew the relation, so forgive me if this is an attempt to work out someone else's poor logic... Presumably ineptitude would be a package manager on a non-Debian distro, and those users might be grammatically challenged?
Seems odd... (Score:2, Insightful)
Re:Seems odd... (Score:3, Insightful)
After all, if they are giving a tax credit, it would encourage them to adopt it to get their money out of it.
Advantages for whom? (Score:3, Insightful)
Huh? Open source software benefits the users, but it's still a drain on the resources of the individual who writes it. The writer might gain from having others contribute to his project, but users who neither write nor contribute have the best cost-benefit ratio.
Taxpayers subsidize work precisely because it benefits them. Patents are granted because we all gain from the disclos
Re:Seems odd... (Score:2)
Re:Seems odd... (Score:2)
A current way to deduct expenses relating to F/OSS is to produce it as part of a 501(c)3, which is not easy to qualify for, set up, or maintain the status of if you're doing F/OSS development in your spare time w
FOSS has always been heavily subsidized (Score:2)
FOSS has always been heavily subsidized. BSD, GNU (RMS's work at MIT?), all the academics doing research , etc.
Tax Credit? (Score:2)
not a subsidy (Score:2, Insightful)
I also don't think we need the IRS to define whether a project is "open" or not.
Re:not a subsidy (Score:2)
Actually, that's exactly what it is, unless the meaning of subsidy has changed in the last 24hrs.
BBH
Re:not a subsidy (Score:2)
Taking $4 from someone against their will instead of taking $5 isn't subsidizing (synonym - "assisting") them. I guess John Dillinger was subsidizing all the banks he didn't rob?
Re:not a subsidy (Score:2)
Only if banks were required, by law, to be robbed by JD.... Sort of like taxes. Getting it now?
BBH
Who should define "open"? (Score:2)
Any time you ask the government to reward you for something, I think it's only fair that the people paying out that reward (the taxpayers) have a say in what counts as rewardable and what doesn't.
I'm all for people saying they have a right to do what they want in their private life, but they have left their private life when they start applying for special treatment from the government.
To the actual point of openness, it
Interesting (Score:3, Insightful)
"we are proposing a 20 percent tax credit for qualified out-of-pocket expenses for open source software developers."
Well let's see what "out-of-pocket" expenses are defined as. Because my 'Home-Office' is paid for out of pocket. So that roughly 100 square foot room represents about 1/10th of my house's square footage. Figure the cost of the house minus the land, that's like $140k, which means I should be able to claim 20% of $14k for that expence. And then their are the numerous PCs, the custom built desks, the wiring, the internet connection... I bet I could pull enough expences out of that room to fully clear my taxes for a year, and enough residuals to help cut down from there on.
I wonder what limitations there are on this, if I could put a dent in my income tax by switching some game mods and tools to open source, I would switch them in a heart beat. 8 hours a week on a pet project to cut down on taxable income, a deal too sweet to pass up.
-Rick
Re:Interesting (Score:2)
Re:Interesting (Score:2)
-Rick
Re:Interesting (Score:2)
I wonder the same thing. No offense intended, but I would hate to have my tax money subsidize game mods.
Re:Interesting (Score:2)
C//
Re:Interesting (Score:2)
Anything that means I pay a bigger share of taxes than somebody who earns the same amount is a subsidy. Why do you think I should be required to shoulder a bigger share of taxes compared to somebody who makes game mods? (Of course, I would be a bit surprised if a finalized law actually would permit the credit to game mods, so this is really just an academic discussion.)
Re:Interesting (Score:2)
-Rick
Solution in search of a problem? (Score:2)
I hate to be the one pouring cold water on this proposal, but it sounds more like an abusable deduction that would allow any programmer to write off 20% of all their computer equipment purchases. If I wanted to abuse the system, couldn't I just write a hello world program, say I spent 2 monthes writing it, throw it on my website, and claim a fat deduction on everything? Would the government have to get in the business of deciding w
Re:Solution in search of a problem? (Score:2)
To put it another way, the amount of effort you'd have to expend on accounting probably outweighs any benefit you'd get. Basically, if you
Re:Solution in search of a problem? (Score:2)
10 taxes = new.civilresponsibility ();
20 taxes.dodge
30 goto 20;
Damn, I can't be bothered coming up with something funnier than this. Must be getting near midnight.
Subsidies as a cure for "economic inefficiency" (Score:3, Insightful)
Even if there is some sort of market failure with respect to open source (it is probably the same one that is cited for R&D in general), trying to cure it with another market failure is not the answer unless the R&D failure is much larger. I once saw a presentation by someone from NSF on this very topic (The Economic Case for Basic Research), and when I pointed this problem out to him, he actually didn't have an answer. I was surprised, given that most of us learned about the inefficiency of taxes in Econ 101.
Re:Subsidies as a cure for "economic inefficiency" (Score:2)
Re:Subsidies as a cure for "economic inefficiency" (Score:2)
Companies are currently underinvesting in R&D (relative to recent 1950s- American history). Part of this is because the money they spend on R&D is taxable at standard rates, while there are other investment choices with lower tax cost (e.g. buying depreciable cubicles). When R&D taxes are d
I disagree, companies are not underinvesting (Score:2)
Re:Subsidies as a cure for "economic inefficiency" (Score:2)
government removes $1.20 from the economy through taxation
$0.20 lost as "waste heat" somehow
$1.00 spent on economically useful projects
$1.00 + $.20 = $1.20, and everyone's happy.
The real problem is that by definition, a governments activities contrary to an efficient market. If they weren't, those activities would already be taken care of by said market. The social merits of those activities are irr
You do not understand my point (Score:2)
Instead, what I said was that taxes are inefficient. The logic is pretty simple. Most taxes we collect (income, payroll, sales, property) are taxes on productive behavior. It is common sense, and easily measurable, that when you tax an activity, you get less of it. Hence, raising taxes causes you, me, your cousin Tony, and just above eve
Re:You do not understand my point (Score:2)
This argument depends hugely on what you mean by productive behaviour.
e.g. If some workaholic is discouraged from working long hours because of high marginal taxes, spends more time with the family and as a result the kids grow up as better adjusted then that in my book is a net productivity/efficiency win. Plus, depending on how much less the workaholic works, you might get some extra taxes.
Like a lot of weak economic arguments your argument assumes there are no economic externalities [wikipedia.org], that economics i
Yes, it does "evaporate into space" (Score:3, Interesting)
No, less spending equals less deadweight (Score:2)
The details. (Score:2)
This is a bad idea in my opinion (Score:3, Insightful)
BBH
Re:This is a bad idea in my opinion (Score:2)
Having the government steal slightly less of your money because you spent some of it developing open source software probably doesn't seem like a bad idea for a lot of us...
Re:This is a bad idea in my opinion (Score:2)
It would be like not declaring charitable donations. All is well till audit time comes up, then they're like, "why didn't you declare these tax breaks", and you're like, "I do not feel it is prudent for the government to subsidize private industry". You'll get an awkward 10 second pause, followed by the worst three months of your life as they audit you for the last 5 years income.
BBH
Re:This is a bad idea in my opinion (Score:2)
Re:This is a bad idea in my opinion (Score:2)
And Microsoft ... (Score:2)
Would you want the US Congress determining the meaning of "open source"?
You can get tax breaks for closed source NOW (Score:3, Interesting)
sounds great (Score:2)
Keep your freakin tax credit and give back my SSI (Score:4, Insightful)
How about if they quit freakin taxing me so much to begin with. A nice start would be SSI, anyone under 40 must surely know that they'll never see a peny of it anyhow (unless the dollar is hyperinflated out of existence). Not only that, but we pay for it twice: once before you get your paycheck, and then it's deducted again after you get your paycheck. I especially resent using that number that dog tags me and makes it a cakewalk to steal my ID, I resent being forced into a ponzi scheme, and especially resent coercing my kids to pay for my retirement.
Re:Keep your freakin tax credit and give back my S (Score:2)
But, at least they're responsible with our tax dollars, maintain a
get a clue (Score:2)
Unless people like Bush manage to turn back the clock to 19th century conditions with people starving in the streets, one way or another, the government will provide minimal food and health care for old people. After all, old people vote.
I especially resent using that number that dog tags me and makes it a cakewalk to steal my ID
If right wing nuts didn't keep interfering in the deployment of a secure natio
Re:get a clue (Score:2)
Ah yes, classic liberal attitude. "Other" people are stupud, so we must protect them from themselves.
I fail to see how the inefficiency of the system are outweighed by the benefits of forced spending.
Social Security was created to protect people from unfortunate economic luck in life. But maybe it has removed some incentive for people to plan and invest for the fut
Re:get a clue (Score:2)
It's not about protecting people from themselves, it's about protecting my pocket book from your poor choices. Why? Because if you don't fund your own retirement, society will have to bear the burden of clothing and feeding you no matter whether you have paid into social security or not.
But you're right to this degree: social security is probably a bad way of doing it because it's regressive and raises fal
Re:get a clue (Score:2)
Unless people like Bush manage to turn back the clock to 19th century conditions with people starving in the streets, one way or another, the government will provide minimal food and health care for old people. After all, old people vote.
People voting didn't prevent the great depression, nor the inflation in the 80's. You can't vote something that is inherently insolvent to become inherently solvent. If people like Bush don't manage to shut down SSI, the dollar will likely become insolvent.
If right
Re:get a clue (Score:2)
The US is becoming insolvent because it is spending a large amount of its tax revenues on military adventures that it cannot afford; in different words, the great, proud US military is financed by loans from the Chinese, the Japanese, and the Europeans.
And the devaluation of the dollar has nothing to do with social security (what a hare-brained idea); it is simply the result of trade imbalances. The fact that the dev
Re:Pot, meet kettle. (Score:3, Insightful)
Sure, investing money is generally better for the economy than stuffing money under a mattress, but that's a second-order effect. The primary effect that is relevant here is that, as a retiree, you will consume scarce resources without being productive, and the more money you saved during your working years, the more scarce resources you will consume for your leisure activities. That means that the notion of "saving
Re:Pot, meet kettle. (Score:2, Interesting)
The primary effect that is relevant here is that, as a retiree, you will consume scarce resources without being productive, and the more money you saved during your working years, the more scarce resources you will consume for your leisure activities.
Granted, folks who are no longer working in retirement consume scarce resources even when living off personal savings. However, I submit that the positive economic impact of the effort such people put into the system t
Re:Pot, meet kettle. (Score:3, Interesting)
Thanks. You do, too.
However, I submit that the positive economic impact of the effort such people put into the system to accrue such resources as to be able to enjoy a reasonable standard of living in retirement outweighs the later drag.
Sure, that's the way the system ought to be working. But we're soncerned with a more subtle question, namely whether the particular handling of the $10k of social security tax is overall beneficial. That is, does giving everybody
Re:Pot, meet kettle. (Score:2)
[nuttiness]Personally, I'd rather take the risk of starving. If I've been of sufficient value to society to be worth the cost of my upkeep, I'll either have accrued sufficient assets to live off of, or have third parties willing to voluntarily pay said costs. If I haven't, the extent to which I am a detriment to society obviously outweighs my benefit. Isn't making such optimal decisions precisely what the free market is best at?[/nuttiness]
I'm with you. I would rather be a poor worthless beggar in a soc
Re:Pot, meet kettle. (Score:2)
You're still misinterpreting welfare as a favor to the recipiant. The fact is that taxpayers don't like beggars on their streets: they're smelly, they're an eyesore, they destabilize society, and they're a health risk. Unfortunately, the options for getting rid of them are limited. We stopped shooting them and banishing them to the colonies is not possible anymore. That lea
Re:Keep your freakin tax credit and give back my S (Score:3, Insightful)
Insightful? Off-topic! and incorrect.
We don't have a Social Security crisis. It's all crap propaganda. It definitely needs to be tweaked, but the politicians are just trying to rile people up and divert attention from real issues. And they're succeeding.
We have a surplus of SS money for at least until 2040. The projections go out for 75 years and sometime before then, we start having a debt regarding SS taxes coming in and money going out. Congressional Budge Office (CBO) studies show that if we don't
Re:Keep your freakin tax credit and give back my S (Score:2)
The problem isn't the social security system. It's the men and women of the Executive and Legislative branch that balloon the deficit with pork barrel spending. Even if we remove the SS blanket, there's no gaurantee that these people wouldn't spend the money elsewhere. Before we talk about changing social security, we need to have people that would be fiscally responsible.
This is wrong on so many levels, I don't even know where to start. FYI, the SSI program is moral and intellectual sewage. Even if we
Re:Keep your freakin tax credit and give back my S (Score:2)
Re:Keep your freakin tax credit and give back my S (Score:2)
You talk in general terms but really don't address SS itself. And your previous post which had no more substance is still moderated insightful.
This is because the fundamental problem isn't how the conclusion is drawn, the fundamental problem is the premise. Get the freakin premises right about SSI, and I'll have no problem arguing about how things will draw out. Untill then, it is a waste of time.
How Sad
Indeed.
Re:Keep your freakin tax credit and give back my S (Score:2)
And everyone over 40 surely knows that the only way they'll see a penny of it is if they keep taxing those of us under 40.
Never underestimate the power of the AARP in actually getting people to the ballot box.
Re:Keep your freakin tax credit and give back my S (Score:3, Informative)
From the rest of your post, I get the impression that you are talking about Social Security. You should know that the term SSI is commonly used to refer to Supplemental Security Income, which is different and completely separate from social security.
http://www.ssa.gov/notices/supplemental-security-i ncome/ [ssa.gov]
No thank you (Score:2)
Fair enough... (Score:2, Insightful)
I am a coder long enough now to know good programming is a form of modern art and thus should be appreciated accordingly.
But... If they just hand over the money, I see some problems on the horizon.
I mean, as long if it is OSS most people just code for fun and fame, but if money gets involved people get greedy (don't we all?) + every Billy-Joe-Bob would become an 'OSS-developer' all of a sudden.
Instead they'd better sponsor resources such as PC's, servers, hosting, free fat pipes for develope
Another alternative. (Score:2)
(For example, there's a major lack of Open Source educational software. So, either offer a grant of X amount for one set of Open Source developers to produce it, or offer a prize of X for the first team that can meet s
No thanks! (Score:3, Interesting)
OSS has already paid for itself here (Score:5, Informative)
As an OSS developer, I can say that working on Open Source code/projects has already paid for itself in tax deductions many times over in the last decade.
Those donations you get from the "Paypal" button on your project homepage? Deductable as gifts, not income.
Those hard drives you upgraded to house your OSS code through RCS on a RAID system? Deductable as a business expense.
The space in your house used to develop/work on that OSS code? Deductable as your "workspace".
In my case, I also host and house dozens of projects for the OSS community, mailing lists, web space, torrent trackers, and lots of other things.
That broadband bill? Deductable. Power to keep servers running 24x7? Deductable.
I also have a "regular day job", and I work at the home office, so that too, is deductable, since it is a dedicated section of the house specifically for that.
Being a long-time OSS developer and supporter has definitely paid for itself many times over in deductions alone, not to mention the Google ad revenue that helps fund the websites I maintain and support, out-of-pocket upgrades to storage, servers, etc.
Having a clueful CPA? Priceless .
Re:OSS has already paid for itself here (Score:2)
Horrible Idea (Score:2, Interesting)
Furthermore, just because software is OS doesn't mean it's good. Why give tax credits to those who don't deserv
This makes sense... (Score:2, Funny)
Therefore it will never be approved.
Comment removed (Score:5, Insightful)
Too bad sales tax punishes the poor (Score:2)
Re:Stupid and pointless. (Score:2)
The government here in Australia brought it in about five or six years ago, on the promise of lowered income tax and generally cheaper goods.
Some of us wondered how that could work - if the government gets less money, how can they provide the current level of services? We were shouted down by record advertising spending promoting the tax. You couldn't turn on the TV or look at the paper without seeing how it'd 'unchain families from their tax burd
Re: (Score:3, Interesting)
s/Open Source/Public Domain/g (Score:3, Interesting)
If you want to impose GPL on me, do it on your own time/dime.
Why just open-source? (Score:2, Interesting)
We already let people deduct charitable donations from their taxable income, why not charitable labor hours? Open-source is but one form of volunteer work, the others should get credit. People's labor is worth something, especially for a worthy cause.
on it's face it looks good, but...... (Score:2)
Tax Credits essentially means that the goverment pays people to develop Open Source Software. Open source is currently being subsidised by corporations who pay people to continue to develop an open source product. Many major corporations employ people to continue OSS proje
GPL can't offer a tax break, it's discriminatory (Score:2)
Subsidies are NEVER economically efficient! (Score:4, Insightful)
I haven't heard a statement as absurd as this on slashdot for at least 5 minutes! The very idea of calling a subsidy "ecomonically efficient" is an oxymoron. If something needs to be subsidized, then its very clear that there isn't enough demand for the product or service at said price in the free market. If the demand is not great enough, then the product or service must improve, die, or be absorbed by a more successful seller (or programmer). Not one single dime of my tax money should go to pay for open source software. If I find value in open source software, I'll VOLUNTARILY donate money to it. Once you take away the voluntary payments, and force people with a gun to pay something (ie, tax them), then the software can no longer be considred "open" source. In fact, its even worse than closed source...because at least you have the option of not buying closed source software.
Re:Subsidies are sometimes economically efficient! (Score:2)
See this [slashdot.org]. Your argument is only correct if you take a narrow view of what economics is. There are many things of value that can't be measured in dollars.
People cooperating through government to develop software for a once off cost that could then be copied millions of times could easily be hugely economically efficient, beating the current ">$40,000,000,000 per year for about a dozen programs developed more than two decades ago" model we currently have that is in large part a tragedy of the commons.
N
Re:I dont know 'bout you guys (Score:2)
Re:Profit!!! (Score:4, Funny)
Re:Profit!!! (Score:2)
Re:Profit!!! (Score:3, Funny)
Great or not, it wouldn't fly (Score:2)
Microsoft, either directly or through industry lobbyists, would argure that it represents an unfair subsidy of its competition. Yes, Microsoft would be able to participate in open source development to take advantage of the tax incentive just like everyone
Re:Great or not, it wouldn't fly (Score:2)
Re:Donations (Score:3, Insightful)
Re:Donations (Score:2)
Your R&D has no hstorical cost to define value (Score:3, Interesting)
Not necessarily, accounting is strange. If you do R&D and develop something patentable you can not list that patent as an asset that has value. However if you buy a patent then you can list that patent as an asset that has value. The rational is that in the former case the developer can just make up a number and say that is the value of the patent, however in the later case we have a historical market
Re:One for all. All for one. (Score:2)
A developer writes a proposal and demonstrates the benefits from the development, the government reviews and grants funds, and at then end of the grant period the developed software goes into the common pool for re-use (BSD-style license I would think.) (Of course, how many software projects fail to meet goals in the estimated time. And wouldn't the news
Re:How appropriate (Score:2)