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New York 'iPod tax' incites media bleating

Four-cent proposal twists knickers

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It's a sign of the digital times: New York's governor proposes a state budget that slashes spending on education and healthcare, lays off hundreds of workers, and increases taxes on everything from cigars to beer to luxury yachts, and most media reports focus on the proposal's misleadingly monikered "iPod tax."

Think we're exaggerating? Check out this partial list:

The blogosphere dutifully followed the mainstream-media herd:

  • Fountainhead Zero: New York State Budget Crisis: iPod Tax"
  • CrunchGear: "NY governor proposes iPod tax (among others) to make up budget shortfall"
  • Modern Conservative: "New York State Budget Crisis: iPod Tax?"
  • Newsvine: "Gov. David Paterson unveils dire New York State budget that includes... the iPod Tax"
  • osmoothie: "New York blasted with 88 new taxes, including an 'iPod tax'"

People, people, people...

There are three reasons to be miffed at the iPodification of the proposed New York State budget by the media. First - and least important - the iPod is being singled out by lazy headline writers as the target of the tax. Not so. Those who have actually read the budget proposal will note that it refers to "digitally delivered entertainment services" and not merely wares from the iTunes Store. We're talking everything from instantly downloadable Netflix gratification to porn-by-the-pound from GigaGrope.tv.

Second, taxing downloadable digital content is not news. Over two-and-a-half years ago, Cnet reported that "15 states and the District of Columbia now tax downloads of music, movies and electronic books." A follow-up article this year added that "In 2008 alone, at least nine states have considered digital download taxes, and at least five of those states have enacted them into law." Taxing the download stream has become a mainstream revenue stream.

Third, and finally, is simple fairness. Financially, New York State is in the toilet. Tax revenue from Wall Street? Gone. Tax revenue from tourism? Crippled. Local real-estate taxes? Evaporating. Paterson's proposed budget tears a bloody $3.5bn chunk out of the state's healthcare budget and sharply increases tuition at the State University of New York and City University of New York systems at a time when students can't even find jobs asking "Do you want fries with that?" because fewer and fewer New Yorkers can afford those tasty artery-cloggers. It lays off 521 state workers while unemployment skyrockets and cuts nearly $700m from aid to schools.

And the discussion centers on the part of the proposal that levies a four-cent tax on a 99-cent tune from the iTunes Store? Puh-leeze...

A little perspective would be welcome. ®

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