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Software Tariffs and US IT Outsourcing?

Cliff posted more than 11 years ago | from the when-your-job-flees-to-another-country dept.

Technology 670

HeelToe asks: "A while back I worked with someone who thought the US should simply impose tariffs on imported products to adjust their price to equalize foreign labor rates to the US minimum wage. I was laid off and my position moved to Canada last year. Since then, I've thought a lot about his ideas, as well as one of our topics of conversation a while back: Why doesn't the US tax the import of software? It seems to me like they should. It's not a "tangible" product (same reason used to deny my co-workers and me NAFTA and Trade Act benefits), but when someone outsources to another country with cheap labor for any other industry, there are usually import tariffs. Why is software different, and how would this change the climate of US IT jobs leaving for other parts of the world if we did tax software imports? I've done some looking on the web, but can find nothing in the Harmonized Tariff Schedule of the United States. I did find this thread from a few months back on's Career Development Forum, but not much else. What does Slashdot think?"

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programmer... (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5619680) a pretty gay job.


Re:programmer... (0)

Anonymous Coward | more than 11 years ago | (#5619821)

You are the biggest programmer in the world!

fp (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5619682)

fucking wooooot!

Re:fp (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5619811)


fucking w00t on you bitch

Depends on the situation (5, Insightful)

Drunken Coward (574991) | more than 11 years ago | (#5619685)

But it seems it would be largely futile to impose such tariffs, as usually international software developement is done by satellite offices of US-based companies, thus making them immune.

Otherwise, it could be similar to the issue of the "Made in America" labels that can be put on any product partially constucted within the United States. So if a widget is manufactured in Mexico, but put together in the US it can still bare the label, exempting it from some tariffs. So for coding and other computer style products, this can be worked around by doing the majority of the work outside the country with the cheaper labor, then wrapping it all up within the borders.

Re:Depends on the situation (5, Funny)

pdan (624244) | more than 11 years ago | (#5619747)

Write code abroad, and compile in US

Re:Depends on the situation (3, Informative)

bwh265 (662121) | more than 11 years ago | (#5619810)

There are some significant differences between Trade Rules (NAFTA, HT Etc.) and Labelling.

Application of NAFTA rules to items with foreign content involves breaking the item apart into it's constituents and assigning values to each part based on cost, labor, and country of origin for that part. Then if enough is NAFTA made, no duty (simplified version). So while, Mexico and Canada wouldn't get hit, India, Singapore etc. could potentially be tariffed. Packaging is usually not a significant cost factor in the calculation from my experience.

The application of international trade tariffs to software is otherwise difficult. The old bits Vs. atoms problem.


- A proud Canadian ashamed of his federal gov't.

Bad Idea (4, Insightful)

Ken@WearableTech (107340) | more than 11 years ago | (#5619686)

This is a bad idea. This tax will not prevent others from loosing jobs. Do you want the IRS going checking source code looking for poor english comments as a clue it was written elsewhere but compliled here?

This tax will do three things:
  1. Software Will Cost More
  2. The Governemt Will Never Give Up This Tax (In 25 years great software may come from many nations, think about the future)
  3. Even Free Software May Be Subject to Tax or Fees
People need to understand that when Corporations are taxed they never loose money; they just charge us more. The only thing that may work is a tax incentive to companies that use American Software.

I'm just starting out in this career field but I can see the writing on the wall, alot of programming is going to go the way of manufactring, overseas.

Re:Bad Idea (2, Insightful)

Blaine Hilton (626259) | more than 11 years ago | (#5619770)

I think this just meens that Americans should "move up" to arguably more advanced jobs then just a standard code monkey.

Re:Bad Idea (1)

Shadow Wrought (586631) | more than 11 years ago | (#5619841)

a standard code monkey

So if an infinite number of monkeys on an infinite number of typewriters will eventually bang out the complete works of Shakespeare, what would an infinite number of code monkeys on an infinite number of boxes crank out?

Re:Bad Idea (0)

Anonymous Coward | more than 11 years ago | (#5619863)

If you must know... []

Re:Bad Idea (3, Insightful)

JohnWiney (656829) | more than 11 years ago | (#5619781)

In my experience, corporations never loose money, except to senior executives. They often lose it, of course.

Re:Bad Idea (2, Interesting)

chickenwing (28429) | more than 11 years ago | (#5619828)

"People need to understand that when Corporations are taxed they never loose money; they just charge us more. The only thing that may work is a tax incentive to companies that use American Software."

From economics, we know that both the supplier and consumer bear the costs of a tarriff. The elasticity of the demand curve determine the distribution of these costs.

That being said, im not sure i completely buy into all this economic mumbo-jumbo, especially as I am out of work and am happy to lay the blame on everyone but myself

Re:Bad Idea (5, Insightful)

koh-der (597436) | more than 11 years ago | (#5619838)

Absolutely a bad idea, i agree. Just because your job moved up to canada does not mean the grass is greener over here (yes I am in Canada). And trust me, it is as bad up here. My friend just got laid off because the company is moving the whole operation to China...

Tariffs could have negative effects not directly but indirectly. Take sugar for instance. Odd example, but hear me out. Sugar has an import tariff to protect the US sugar manufacturers. It protected the manufacturers but it had a huge indirect effect. Since the sugar prices were cheaper (especially in Canada), all the candy manufacturers moved up to Canada.

Now think software. If software tariffs indeed is feasible and succeed, sure it might protect software manufacturers, but what about those who depend on them? If a software for factories (robots, assembly line etc) is imposed tariffs, where would the factories stand? What about consulting? Tax software? Could see CPA's opening up offices in canada just to avoid the massive software prices...

Rather than protectionism, I think more effort should be put towards innovation. Anyway, that is my 2 cents.

Re:Bad Idea (1)

0x7F (158643) | more than 11 years ago | (#5619872)

This tax will do three things:
  1. Software Will Cost More
  2. The Governemt Will Never Give Up This Tax (In 25 years great software may come from many nations, think about the future)
  3. Even Free Software May Be Subject to Tax or Fees

People need to understand that when Corporations are taxed they never loose money; they just charge us more.

And less people buy their product (barring a monopoly), and that equates to money lost.
The only thing that may work is a tax incentive to companies that use American Software.

This incentive will do three things.
1. Taxes Will Be Greater To Fund It
2. Corporations Will Never Give Up This Incentive (as long as they can afford representitives)
3. Free Software May Be Exempt From This Incentive, Making It Less Competitive

Re:Bad Idea (-1, Flamebait)

I'm a racist. (631537) | more than 11 years ago | (#5619877)

Software Will Cost More

It'll only cost more to those who buy from outside the US, just the way it should. That's the point of the tax.
The Governemt Will Never Give Up This Tax (In 25 years great software may come from many nations, think about the future)

Hmmm... great software coming from another country. Let's think about that for a minute. I'm not a linux user (ie. zealot), but I suppose it's okay. That came from a geek in Europe. It was originated there and did not cost Americans their jobs. That's not so bad.

When a company pays an Indian (dots, not feathers) instead of paying an American, that's bad. Not to mention the fact that those filthy fuckers produce some seriously shitty quality code.

Sure, I'm a racist, and I hate them, but you can't really deny that those dirty bastards are pretty much incompetent.
Even Free Software May Be Subject to Tax or Fees

This is certainly possible, but rather unlikely, I think. Feel free to debate this amongst yourselves.

People need to understand that when Corporations are taxed they never loose money

First of all, learn to spell! The word is lose not loose (you made the same mistake twice, so you clearly think that's the way to spell it). Anyway, when a corporation is heavily taxed, that increases the cost to the consumer (which has a limit before the consumer decides not to bend over any farther). This basically ends up cutting into a corporation's margin. Do you really think they don't already charge you as much as possible just because there aren't any tariffs?

I'm just starting out in this career field

No wonder you don't know shit...

A new spin on (0)

Anonymous Coward | more than 11 years ago | (#5619688)

Pretty funny, and not gross like

welcome to 2002, fucktard (0)

Anonymous Coward | more than 11 years ago | (#5619701)

You pick up news about as fast as slashdot does.

FP? (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5619692)

I think I might have the FP for the FT!


Anonymous Coward | more than 11 years ago | (#5619693)




Tarriff Law (3, Insightful)

Yankovic (97540) | more than 11 years ago | (#5619697)

Actually there are a lot of subtleties to tarriff law. For example, if production of something occurs in another country but is shipped to the US in a partially completed state and then finshed here, there are no tarriffs. It'd be very difficult to do what you describe for code, though it's always possible. I think a lot more people would have to be affected by outsourcing in order to get the law adapted (that's not to say they won't be soon).

Re:Tarriff Law (1)

arkanes (521690) | more than 11 years ago | (#5619800)

One of the other posters is totally correct, they'd "import" it as source and compile/package installers in the US. I can't think of a reasonable way to stop that without causing all kinds of horrible problems, including the death of free software.

Re:Tarriff Law (0)

Anonymous Coward | more than 11 years ago | (#5619803)

the first rule to becoming a good /. troll is to make comments that seem to make sense, but are troll

Jesus Saves! (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5619698)

Ask Jesus into your heart today!

The ONLY Way, Truth and Life!

Slashdot thinks you had a really cute dog in 1997 (0)

Anonymous Coward | more than 11 years ago | (#5619699)

awwww, cute! []

... but that your economic ideas are dumbass. HTH, HAND.

never work (0)

Anonymous Coward | more than 11 years ago | (#5619700)

not a chance~!

Tax IMPORTS of software? (0)

Anonymous Coward | more than 11 years ago | (#5619703)

Are you merely stupid, or did you not know that Microsoft is the main software used worldwide? Douchebag!

Re:Tax IMPORTS of software? (3, Insightful)

Ken@WearableTech (107340) | more than 11 years ago | (#5619756)

This AC made a good point. If we tax incoming software other countries will tax software comming from the United States. That would result in a lot of lost jobs.

Re:Tax IMPORTS of software? (1)

tjansen (2845) | more than 11 years ago | (#5619866)

Pssst, don't tell anybody that a price increase for Microsoft products would help free software to rule the (rest of) the world.

fp (-1, Flamebait)

Anonymous Coward | more than 11 years ago | (#5619704)

FP, bomb iraq, BUSH RULES

Eat a dick, liberal fags

fp? nope (-1, Flamebait)

Anonymous Coward | more than 11 years ago | (#5619836)

despite the fact that YOU FAIL IT!!

i agree, the liberals may sample some dick... they probably prefer it with the special sauce... wiphahhhsh

resons we might not have them. (2, Interesting)

mpost4 (115369) | more than 11 years ago | (#5619705)

First I would say that this probably was the same reasoning behind the mass influx of H-11b's (no I don't have anything against people coming to this country to make a better life for himself/herself more power to them) The software companies probably said there were not enough people to do the work they needed to get done. Remember that this probably setup back during the dot com's time. It does apperar that the EU does have tariffs [] Here is another article about tariffs 08.550.phtml?type=trade [] . Yes it is from the BSA []

So is there an answer, there will be much opposition to tariffs, companies will not want this because it will cut into their bottom line. So are we going to get tariffs, do we want tariffs? Tariffs will raise the price of software (not like the companies do not make a lot of money on software as it is and probably could absorb the cost of tariffs with out raising prices, but they would rather not)

Re:resons we might not have them. (0)

Anonymous Coward | more than 11 years ago | (#5619749)

Sorry bub. H1B was not setup during dot com era. It was setup far far in advance of that. And there have been significant abuses ever since.

Re:resons we might not have them. (0)

Anonymous Coward | more than 11 years ago | (#5619849)

Actually EU solves the problem differently. In Germany (for instance), to lay someone off, you have to pay them their salaries until retirement age - thus companies have a large incentive to retain employees since they have to pay for them anyway. I know this is why IBM didn't close down a German site a few years ago, instead transferred them work from the US. Software development is moving offshore. I work at one company where they just opened an India office and announced to the application staff that all application programming is moving to India. Thankfully I don't work in applications there. Paul

first (-1, Troll)

Anonymous Coward | more than 11 years ago | (#5619706)


economics (0)

Anonymous Coward | more than 11 years ago | (#5619707)

swallow your pride and study a little econ. Tarriffs are a short term bandaid solution. They hurt everybody. If Canada or India can do your job for 10% of the cost HUMANELY, then they should be appreciated and utilized, and the cost savings will be passed through competition to the customers. If it is being done by prison labor or starving children with unsafe working conditions, that is a separate issue. The smoother we spread the wealth of california around the world, the less suffering for all.

Re:economics (0)

Anonymous Coward | more than 11 years ago | (#5619764)

What the heck to you mean by "HUMANELY"? Most Programmers in India have much better quality of life than their US counterparts compared with prevailing local conditions.

Comparing with purchasing power, Rs 10 make $1 and an average IT worker makes close to 0.25 - 0.33 of an equivalent US worker (in terms of dollars). That is still a lot better than a local US worker.

Why its difficult to tax (1)

pOrATa paTima (78324) | more than 11 years ago | (#5619709)

Most of the IT exports are specialized software and rarely generic. Levying tariffs on specialized software is difficult to categorize.

Most of all, IT is not yet unionized and has nothing to contribute to the coffers of politicians. The day this is done, expect tariffs on software.


Anonymous Coward | more than 11 years ago | (#5619712)

Dumb idea regardless of market, commodity (1, Insightful)

Ars-Fartsica (166957) | more than 11 years ago | (#5619713)

There is so much outstanding research to indicate that this is such an inane idea that you shouldn't even think for a minute of presuming that you are special or software is special. Tariffs are dumb. They cause wars.

Iraq: It's not about Oil! (4, Funny)

Larry_Dillon (20347) | more than 11 years ago | (#5619834)

I was wondering why we are at war with Iraq.
It must be those damn software tarrifs!

Re:Dumb idea regardless of market, commodity (2, Insightful)

extrarice (212683) | more than 11 years ago | (#5619840)

It is not my intention to say "you're full of it", but I only see inflamatory statements in your post - no facts to back them up. If you're going to make statements like that ("They're dumb; they cause wars; there's so much research; etc"), I suggest posting links to the facts. That way we can all better ourselves by learning truths.

Seems tough to enforce (1)

John Jorsett (171560) | more than 11 years ago | (#5619716)

Since code can flow internationally over networks, it would be tough to detect evaders. Just as an example, if you as a corporation wanted to avoid a tariff, you could "contract" some schlub for a low price to "produce" a 500,000 line product. He'd in reality get it done in India, take delivery via the internet, then hand it over to your company. Plausible deniability for your company, kinda like being Kathie Lee Gifford getting her stuff from Southeast Asian sweatshops.

you need a job ? (0)

Anonymous Coward | more than 11 years ago | (#5619720)

then tax whatever took away your job

That's retarded. (0)

Anonymous Coward | more than 11 years ago | (#5619723)

Enough said.

Your're retarded. (0)

Anonymous Coward | more than 11 years ago | (#5619783)

Now enough's been said.

You were laid off because? (0)

Anonymous Coward | more than 11 years ago | (#5619724)

What is your point? Are you a software engineer, programmer or what? You smell just like a Helpless Deak person. Tax software. it is already taxed, but not to YOUR benefit! What is your point? If you were worth a shit at your job, then you would not have been laid-off. Nuff said fool!

agreed (0)

Anonymous Coward | more than 11 years ago | (#5619727)

I agree. After all, we taxpayers support alot of these companies. When companies outsource, it is fair to slap an import duty on them. Think of all of the companies who get tax credits for R&D costs.

Re:R&D Tax Credits (1)

tomhudson (43916) | more than 11 years ago | (#5619786)

... are usually given by the government to attract jobs to an area. So if you tax them instead, they leave.

Look, the only 'software' your idea would affect would be imported games. Do you really want to pay $100.00 for Mario Brothers?

Re:agreed (0)

Anonymous Coward | more than 11 years ago | (#5619843)

Believe it not, there are a lot more software consumers than software developers. With this proposal, consumers lose, developers gain. Why is this in the best interest of the US? Of course, the same reasoning applies to all sorts of issues, but congresscritters seem to think the producers of a product are more important than the consumers - wonder why$ (BTW, this web site is read world wide. Terms like "this country" don't mean much.)

Because they can't (1)

Telastyn (206146) | more than 11 years ago | (#5619730)

How do you determine where the software comes from? It's simple to incorperate in the US. It's simple to package product in the US even if the coders aren't here. It's simple to compile or make the code available in the US, even if the coders aren't here.

Nooooo! (2, Insightful)

spencerogden (49254) | more than 11 years ago | (#5619732)

Tariffs are always a bad idea. Instead of looking at way to implement them in the software industry we should looking at how to remove them from other areas. The only people tariff hurt are consumers, who have to pay more for the product.

I am a soon to be CS grad, and I am scared of the current job market. But if software can be produced better and cheaper elsewhere, oh well. Tariff are just crutch.

I'm all for it. (1)

bob_the_clown (617138) | more than 11 years ago | (#5619735)

I'm all for it. As a college student, majoring in CS, one of the bleakest prospects is the fact that I won't have a job in a couple of years when I graduate. Anything (reasonable) to keep US jobs here is a good idea in my book.

Re:I'm all for it. (1)

pOrATa paTima (78324) | more than 11 years ago | (#5619797)

Graduating from a US school does not mean that you are guaranteed a job and a prosperous life. There is nothing like US jobs and jobs staying in US. Jobs go where they are the cheapest to produce. Be it your sneakers, clothers or your work.

Learn to be competitive with the rest of the world.

Re:I'm all against it. (0)

Anonymous Coward | more than 11 years ago | (#5619805)

I worked from remote for US companies and it was great experience - working with such distributed team. :) Anyway, If you're not lazy or stupid or narrow minded - you'll find your job, I'm sure.

I'm against it... (4, Funny)

dlek (324832) | more than 11 years ago | (#5619737)

I'm a Canadian! :)

Re:I'm against it... (0)

Anonymous Coward | more than 11 years ago | (#5619779)

Me too. Seems to me like america is run by a bunch of dumbass lawyers, politicians, and dumbass corporations. This whole law about hiding information from ISP's is pure bullshit.

Re: I'm a Canadian! :) (1)

tomhudson (43916) | more than 11 years ago | (#5619839)

Me too, but that is just another excuse for them to get angry/impose tarrifs. They're just jealous that we have universal medical coverage for less per capita than they spend for partial medical coverage because of HMOs, and everything else that makes us different.

So employers can hire healthier people, not worrying about catastrophic health-insurance bills, which makes everything a bit cheaper to make up here.

If the US wanted to reduce its' corporate costs and make business more cost-competitive, instead of whining, they could do away with the HMOs and give everyone access to health care. After all, a healthy, educated workforce is cheaper in the long run.

Re:I'm against it... (1)

abc_los (638007) | more than 11 years ago | (#5619848)

I'm a Canadian!:)

I'm so sorry...

who cares (0)

Anonymous Coward | more than 11 years ago | (#5619854)

don't you canadians realize that down here in the USA we don't care what you think?

Re:I'm against it... (1)

bman08 (239376) | more than 11 years ago | (#5619861)

What's awesome about your ppl is that companies can pay you more AND remain competitive because the government eats the cost of healthcare.

Why? (0)

Anonymous Coward | more than 11 years ago | (#5619753)

Why should everyone else pay more for software so you can be uncompetitive?

Very bad idea, what about open source? (4, Insightful)

antis0c (133550) | more than 11 years ago | (#5619754)

Very bad idea in my opinion. What happens when you get into Open Source Software? If the government thinks imposing tariffs on software is a good idea, they might deem it ALL software, including Open Source. So will that mean for every time I download OpenBSD I'm going to have to pay a tariff? What about software mirrors? Components? Data itself? I'd rather not open up that can of worms..

We don't think. (0)

Anonymous Coward | more than 11 years ago | (#5619760)

We are automatons.

Like 1000 brainless monkeys typing code until something works.

We work in Redmond, WA.

Tariffs (1)

ackthpt (218170) | more than 11 years ago | (#5619761)

I'd be interested to see how this applies within the framework of NAFTA and WTO. The US just got slapped for the Steel Tariff. Like many things, outsourcing to remote location(including countries) has its drawbacks. A few friends have had to put in really strange hours because of meetings/teleconferences with overseas offices, which can be a real drag. "We're cheap, if that's what you're looking for, just don't ask about our customer support, anyone who really knows anything about your problem is probably sleeping right now." I had problems with an IBM RS/6000 a few years back and was very unimpressed by having my tech support call answered by a low level tech (read: knows how to answer a phone and what a keyboard and monitor are, but after that he just types up notes for others to respond to later) in Oz (I was in Michigan at the time) Left to my own devices that would have been the last piece of Blue equipment I ever bought.

Of course, lunkhead that I am, I've built a home computer out of a large-ish pile of stuff, all from China or Korea. I'd feel a lot better if some of this stuff was made nearby and I could speak to someone in english without some heavy accent, regarding support. The old anti-dumping tariff on memory doesn't seem to have any impact, even tangentially, to the 9,999 things that go into a PC.

it's kind of ironic (5, Insightful)

g4dget (579145) | more than 11 years ago | (#5619762)

Among advanced nations, the US is engaged in a race to the bottom when it comes to working conditions, salaries, job security, and the environment. And for years, US politicians have made fun of Europeans because their labor costs were "too high".

Yet, when other countries get their labor costs to be lower than those of the US, then Americans start complaining and want to impose taxes. Well, which is it? If the US can impose tariffs on Indian computer products, is the US willing to have tariffs imposed on US computer products by Europeans, whose labor costs are higher because of better social services?

I think this Onion article [] points out what really is going on: many Americans just can't deal with the fact that the rest of the world is different and actually likes is that way.

Re:it's kind of ironic (1)

the eric conspiracy (20178) | more than 11 years ago | (#5619871)

US is engaged in a race to the bottom when it comes to working conditions, salaries, job security, and the environment.

This comment is utterly preposterous on the face of it. The US has the lowest unemployment rates and highest per capita income of any developed country.

Taxes and Foreign labor (1)

luzrek (570886) | more than 11 years ago | (#5619765)

In my opinion you will not see tarifs on imported software because the corporations which import that software are very large and very powerful and it would be against their interests. Additionally, imposing tarifs on software would be a protectionist move and would harm the US economy in the long term (as well as harm those in other countries whose lives are being improved by their relatively high local wages) since it would discourage inovation.

On top of all that, MS and other big software companies would oppose it since it would encourage open source and free software (which wouldn't have the tarifs imposed since it is free/relatively low cost).

This is going to sound calus, but US computer programmers need to realize that just knowing how to program a computer does not gaurantee a high paying job. People who have an additional skill and can use their programming skills to enhance that skill will be in a much better position. That is why MIS's are able to get jobs as Database Administrators and CS majors generally cannot.

Free trade? (1)

scalis (594038) | more than 11 years ago | (#5619769)

I think the US or any country for that matter should apply the same level of taxes for this as it does on other products.
No product should be subsidized by the government wether it is US steel or European grain in any country that embrace free trade.
Either you let free trade show its advantages and disadvantages by letting it run free or you impose the same level of taxes/fees for all imports.
I hate to say this but if someone beats your prices by 50% then taxes is not going to be of much help in the long run if the quality of the delivery is good enough.

Tough cookies (1)

Gothmolly (148874) | more than 11 years ago | (#5619772)

If they'll work cheaper than you, its YOUR problem, not theirs. Complain to your local Congressman/MP about the government-sponsored inflation which raises the costs of doing business where you are.

Dumb. (0)

Anonymous Coward | more than 11 years ago | (#5619774)

I think this is a pretty dumb idea really...

The world does not revolve around the US (Well, not ENTIRELY)

Taxing software (1)

jetkust (596906) | more than 11 years ago | (#5619776)

Why doesn't the US tax the import of software?

Taxing software seems impossible. What exactly is importing software? Sending code over FTP? Sending the finished product? If its compiled in the US and developed elsewhere is that still imported?? Maybe taxing the actual labor that would make more sense.

Welcome to free trade (1)

RealSkee (627856) | more than 11 years ago | (#5619778)

There is a slight chance that some tariffs might be imposed but I doubt it. The computer industry is much to powerful at the moment to allow such a swing, it would mean that the major idea behind the free trade is being neglected. Dream on.

US Software development will be dead in 10 years i (0)

Anonymous Coward | more than 11 years ago | (#5619780)

US Software development will be dead in 10 years if the government doesn't step in. People are going to india to get their software made at 1/5th the cost.

US National Security Considerations (1)

Montgomery Burns III (642155) | more than 11 years ago | (#5619787)

Lets not forget about the opportunity for mischief.
I frankly get a bit nervous about certain integrated systems that drive many aspects of the nation's critical infrastructure where there is no domestic producer.
I am not attempting to call into question the motives of the people of Elbonia... They are good folks. But might Elbonians have potentially higher motivation to introduce rogue backdoors?
Could the Elbonians have political or other motivation to do harm to the USA?

Re:US National Security Considerations (1)

scalis (594038) | more than 11 years ago | (#5619813)

I frankly get a bit nervous about certain integrated systems that drive many aspects of the nation's critical infrastructure where there is no domestic producer.

Quit whining, you still have Microsoft to rely on! :P

Re:US National Security Considerations (1)

Montgomery Burns III (642155) | more than 11 years ago | (#5619833)

What was I thinking?

Tangible? (4, Insightful)

jasonditz (597385) | more than 11 years ago | (#5619788)

If software isn't tangible how can it be imported to begin with?

Software in an intangible form is basically just an idea. Can we tax ideas now? How can you regulate its importation to begin with if it doesn't exist in any physical way? Are we going to prohibit foreigners from coming into the country on vacation now, lest they write a piece of code, and in effect, import software?

What about all the software that hasn't been written yet? Maybe we should start taxing foreigners on the basis of software they might potentially create in the future, since the software really exists in his mind, just waiting to be written down...

Lies, Damn Lies, And... (5, Insightful)

sidespace (652582) | more than 11 years ago | (#5619790)

There are several fundemental assumptions this post makes that have to be corrected.

First, as someone who works a lot in both the USA and Canada, I can guarantee you that living costs in Canada are, on average, HIGHER than the USA. If your job was moved to Montana (which has lower living costs than where you are now) would you be asking Montana for import tariffs? Of course not; so please, drop this argument.

Second, I see a lot of Slashdot posts discussing the movement of I.T. jobs to "cheaper" locales. A lot of the arguments made against this move are the same arguments that were lodged against Japanese auto companies in the 1970's. North American IT workers may be in denial now, but the offshore trend will continue to deteriorate the IT job markets of both the USA and Canada.

So what is the solution? Just as the auto-workers realized in the 1970's, the successful worker will be one who not only performs menial tasks (i.e. programming) well, but also adds significant value to their position. For example, if you are a good communicator AND understand technology you will have no problem finding a job. If you prefer to lock yourself in the back room and code (and complain to Slashdot) then you are going to be in for some tough times. Keep in mind that times now, on average, are good. Use this time to retrain and expand your skillset, not reading up on arcane NAFTA regulations.

Re:Lies, Damn Lies, And... (1)

Malc (1751) | more than 11 years ago | (#5619856)

I disagree. I moved from Denver to the most expensive part of Canada: downtown Toronto. The cost of living isn't higher... the salaries are often lower though.

Intellectual vs Physical Property (0)

Anonymous Coward | more than 11 years ago | (#5619794)

They don't add import tariffs because software is "intellectual property" and much different than "physical property". It is much too difficult to track the movement of something like that and that can be distributed so easily.

That is exactly why distributing music and movies is theft is because its just like someone stealing my car....

Oh wait, those view points contradict one another, dont they. Oh well I'm the US government I'm allowed to do that.

Re: WMD are evil we need to disarm those that have them. How? By using our WMD's on them of course....

So you want worse software as long as its US made? (1)

happyhippy (526970) | more than 11 years ago | (#5619798)

Not that Im saying all software made in the US is bad, but slapping a tax on all non-US software is just going to make people use inferior though cheaper products.

Most Software is Developed "Internally" (1)

Marillion (33728) | more than 11 years ago | (#5619801)

Most "premium" software is developed internally for non-IT companies to solve a need unique to their industry. Consider airline reservations systems and the airline industry.
It would be "tricky" to manage what a large multi-national does for offshore programming.

stupid (0)

john_smith_45678 (607592) | more than 11 years ago | (#5619802)

It's a stupid idea.

Global Minimum Wage (1)

tjansen (2845) | more than 11 years ago | (#5619814)

Instead of punishing other countries that are less wealthy, why not establish a international minimum wage [] . You can still impose tarrifs on those countries that don't have them, but this would as well protect people in your country and help people in less developed countries. And, of course, re-established international competition at a fairer level.

What you didn't mention: (5, Interesting)

Ron Harwood (136613) | more than 11 years ago | (#5619815)

I had a look at your resume [] and what you didn't mention was that the company [] you worked for is based in Canada [] and got its seed funding from a Canadian Mutual Fund [] ... ...perhaps you didn't know that... Neither did I until I looked at your resume and did a google search on the last company you worked for.

So really, Canada should be charging a tarrif on that software because they lost that job to the states for 4-5 years... ;)

Very simple reason... (0)

Anonymous Coward | more than 11 years ago | (#5619817)

If the US decides to apply taxes to imported software, all other countries may also decide to follow the example (reciprocity) and tax US-exported software.

Considering that US companies make a lot of money exporting software to other countries, it may not be a good idea.

Against State Coercion and Economic Harm (1)

MSTCrow5429 (642744) | more than 11 years ago | (#5619819)

To impose tariffs on software would be an illiberal exercise of state power to benefit a small group, programmers, at the expense of consumers. If person x and person y agree to do business at rate z, this does not mean that person d can use governmental coercion against person x and y to their own advantage, namely changing the dynamic of person x and y to their favor. As with the steel industry tariffs, for every programmer job saved, many more would be lost in other industries, as tariffs drive up production costs, thereby hurting the economy. No one has the right to interfere with the private business of others as a shield against market realities. If you cannot compete against someone else, regardless of if they are next door or in another country, this means you either find an advantage or find a new line of work. It does not mean you find a policeman to smash their hands or break their legs to impede their ability to operate in a free marketplace.

In other words, "Bugger you jack, I'm all right." (1)

John Hasler (414242) | more than 11 years ago | (#5619820)

> A while back I worked with someone who thought
> the US should simply impose tariffs on imported
> products to adjust their price to equalize
> foreign labor rates to the US minimum wage.

Better yet, outlaw all imports. I'm sure that would create lots of jobs.

Trade is a positive-sum game.

Four problems with this. (2, Insightful)

mcc (14761) | more than 11 years ago | (#5619822)

  1. What about free software? (With a little f.) Is it tariffed? How?
  2. What about Free software (with a capital F) which is resold with added services such as support? Much such software is created internationally. An obvious example would be Redhat Linux, which was written by mostly unpaid people around the globe but sold by a U.S. company. Would this be an import, since many of those who wrote linux-- including the two people ostensably most responsible for the product at the moment (Linus Tourvalds and Alan Cox, the latter of which is actually a RedHat employee in britain last i checked) are not U.S. citizens and are working outside the U.S.? What about something like S.U.S.E., which is roughly the same product as RedHat with a different configuration and setup procedure, but is sold with support by a German company? If a software tarriff were imposed, could S.U.S.E get around it by encouraging their customers to just download the free version of their product and burn it to CD-R, then offer just "support"? Is an automatic update service like Yast2 [] "support" or "software"?
  3. Where do you draw the line between hardware and software? Is firmware hardware or software? If we tarriff firmware, do we have to tarriff mp3 players from japan which just happen to have software running within the mp3 player? What if that mp3 player comes with a software cd containing drivers? Does this make it software? This admittedly is not a big issue. The biggest issue, however, is:
  4. Right now no country that i am aware of tarriffs software. However, if the U.S. tarriffs software, it seems pretty likely to me that other countries will start doing so as well. This will lead to a pretty nasty situation for the U.S., since by far the U.S. is the biggest exporter of software! If the U.S. inadvertantly makes software tarriffs common international practice, they have the most to lose, both in that they will probably be paying the most taxes and that raised prices on U.S. software in other countries will be more likely to stimulate "local" software companies around the world.

Way to Go, buddy (0)

Anonymous Coward | more than 11 years ago | (#5619823)

Way to go buddy, you just killed free software.

I was trying to keep this under wraps, but you blew it. The first step onto a very slippery slope has now been taken. I may as well reveal the chain of events that will follow:

  1. Underskilled Americans who can't stand competition try to put up barriers to eliminate it.
  2. Tariffs result in the vast reduction of foreign-produced software made available for sale in the U.S.
  3. Less competition for software companies results in efficiency declines. Software begins to cost more and begins to lose market share to Open Source software.
  4. Software companies complain, saying that great deals of this "Open Source Software" is in fact written out of the country. Their argument stands because companies like RedHat do in fact make a profit and directly compete with them.
  5. Laws are passed to restrict free software.
  6. Richard Stallman flips out and kills everyone with his Real Ultimate Power! []

See what your protectionist paranoia has done? You've doomed us all.

Stupid (1)

Jason1729 (561790) | more than 11 years ago | (#5619826)

This is the stupidest idea since the great depression. Anyone who thinks taxing imports is a good idea doesn't understand the most basic economic concepts. Do a websearch on the Smoot Hawley tarrifs. They were a major cause of the depression.

ProfQuotes []

Sure, we need a recession! (2, Interesting)

farrellj (563) | more than 11 years ago | (#5619835)

Tax Software like that, and you will trigger a deep recession. Software shoud compete on it's merits, not on marketing, and it shouldn't matter where it comes from...common, does this person really think that us North Americans (Canadians and USAians) couldn't compete against anywhere else without artificial barriers? Good software will eventually rise to the top especially as Open Source becomes the major paradign for software creation.


We need this! (1)

MCHammer (110588) | more than 11 years ago | (#5619837)

I personally know of several companies that already have development centers in India and are planning to move all operations there soon. The average wage for these developers is 20K per year. The problem is that they can live like kings there on 20K.

Nobody in the US can afford to pay for college and raise a family on such a salary. The result will be a complete loss of technical skills from our country (US). At least with textiles, they have to pay to ship it back. There is no cost associated with e-mailing software back to the US. If we do not take action soon, the number of bright young kids going into computer science will plumment and our country will be void of software expertise....


Its been tried before and it doesn't work (5, Insightful)

ShadowMind (546734) | more than 11 years ago | (#5619844)

I'm a bit too drunk to comment on this fully, but a few points as to why this approach doesn't work in the long term.

The UK tried this when other countries semiconductor capabilities exceeded their own - tariffs were impose on imported components. It was meant to protect the UK computer industry - but it backfired badly. Unable to compete in the manufacture of ICs, UK companies couldn't even import components and produce full systems competitively. The policy led to the death of systems manufacturing without benefitting the component producers.

The same thing happened to the UK film industry. In order to fight against films produced in Hollywood, a law was passed requiring a certain percentage of all films to be produced in the UK. Since the general public wanted Hollywood films, the only way to comply was to show supporting features produced in the UK. Since this was more profitable than producing feature films, the UK film industry ended up producing supporting features about candlemaking in Birmingham. So it died. We are now seeing some recovery, but only after at least two decades of decline.

As has been seen in the automotive industry, protection of national producers in this manner only leeds to apathy within the domestic industry. Protected from outside innovation and competition there is no reason to improve, instead the industry will settle into a cosy cabal with domestic producers. When, eventually, the import duty is removed the existing industries are far behind their foreign competitors. This is detrimental not only to the industry long-term but also to the domestic consumer.

Eventually, for the reasons outlined above, domestic producers will not be able to export - for two reasons. Lack of competition will lead to an atrophying of the state-of-the-art within the country and hence be behind other counties producers that are open to a free market. Also profit from export will be much lower than domestically. These factors will produce an inward facing industry which does nothing to help the balance of trade.

Lastly, those countries who have tariffs levied against them, may retaliate with equivalent tariffs or legislation against the import of other goods and services from the tariff imposing country which will hurt the countries export marketing and thier domestic industry as a whole.

For better or worse (and I believe better) we all operate in a global market. This drives competition and innovation and in the longer term will bring benefit to all. Protectionism only serves to kill those it seeks to protect.

Because the US collects Microsoft Tax worldwide (1)

zmahk31 (33160) | more than 11 years ago | (#5619845)

Collecting tariffs on software imports would be the most stupid thing to do. Billions of dollars each year flow into the US economy just because of the global Microsoft Tax. This only works for as long as other countries continue to play nicely, and don't get funny ideas like trying to get their cut of Microsoft's tax by themselves levying tax on software imports (and imports of other "intellectual" property like movies that have zero material value but nonethelesse generate huge flows of cash into American pockets).

In short, the US is arguably the worlds greatest profiteer from trading software, and would be damn stupid to give this up to just "protect" the lifelyhoods of a bunch of hackers. Nobody's going to shake up a system that's probably the only reason for keeping the US trade deficit from causing instant economic implosion.

Better for Micro$oft... (1)

Cheerio Boy (82178) | more than 11 years ago | (#5619850)

This is fine in theory...

that is until you want a Linux distro made outside the US like say SUSE...

What we _do_ need is a control on our US population other than corporations and the government that _teach_ people rather than prefer them stupid. The jobs aren't just going away because of money. Some of them, no flame intended, are going aways because the IT market is glutted with a lot of paper people that never are up to snuff. The good ones get drowned or hang onto small lifeboats to survive while the bad ones get big fat paychecks for doing a crappy job.

The companies will cease moving the jobs when two things occur:

1 - Salaries, and job working conditions get hashed out to normal levels like they are in other types of jobs.
2 - People work as hard as other people in other positions to make the companies money. (No offense to the hard-working people - I'm referring to the useless that pretend to know IT skills. You all know who they are.)

A bad idea for so many reasons... (5, Insightful)

praksys (246544) | more than 11 years ago | (#5619855)

1. Trade war. The US exports for more IP than it imports. Just to give you an idea of how big the difference is, US spending on R&D is roughly equal to spending by the rest of the OECD combined. When it comes to software production the disparity is even larger. If the US starts a trade war in this area then they have almost nothing to gain, and they have a very large and lucrative export sector to lose.

2. Racism. Why is it that people have so much trouble with the idea of competing with poor people for work? Do you think they aren't hungry enough already? Does the idea of them actually developing some sort of economy disturb you? After all they have to compete with cheap mass produced products from industrialized nations, and massively subsidised food. Why shouldn't we have to compete with them for work?

3. Self-interest. Why the hell would any country want to encourage their best and brightest to waste their talent doing work that could be done for a fraction of the price by cheap labor in other countries? For that matter why would you want to waste your life doing something that is not economically productive? Find something worthwhile to do with you life, instead of trying to strong-arm your customers into paying artificially inflated prices for skills that are not needed.

4. Freedom. It isn't just good for software. When ever you see someone who is trying to shut out the competition you can be pretty sure he is trying to get a free ride by screwing everyone else.

You don't want free software? (2, Interesting)

stienman (51024) | more than 11 years ago | (#5619858)

Why is software different

Because it's bits and bytes, and can be replicated infinitely. So a programmer makes a program in 40 hours, and it's taxed forever, even if the programmer isn't continuing to work on it.

and how would this change...if we did tax software imports?

It would legitimize software as a 'thing', which has the same copyright, property, IP, patent, etc protections as things that exist physically and can't be duplicated for free.

If software is ever to be free, programmers need to be free. For programmers to be free, we must invent real jobs that pay well that a real programmer can do for only a few hours a day. Then it won't matter if your job is shipped out, since your job simply won't exist anymore.

Oh, wait, software will never be free. Sorry, guess you're screwed...


Downloadable Software (1)

Sepherus (620707) | more than 11 years ago | (#5619859)

What about downloadable software? Does downloading software from a non-US server count as importing?
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