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Space

Bid to Tax Satellites Rejected 125

Posted by michael from the tax-shelter dept.
Kierthos writes: "This article updates an earlier Slashdot story about the Los Angeles County Assessor's office trying to tax satellites in orbit around the Earth. Short version: no go, the satellites don't get taxed."
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Bid to Tax Satellites Rejected More

Bid to Tax Satellites Rejected

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  • like the ones my country has in orbit ? or russia ? or china ?

    This would be a major infringment on other countries sovereignity. If LA really needs an extra cash tax it's own inhabitants, not the whole world.
    • If you read the old story you would see that the owner of the sat was in LA, and they have some law that says that they can tax your equipment even if it's not in LA but you own it.

    • "If LA really needs an extra cash tax it's own inhabitants, not the whole world."

      Dude, IIRC LA was planning on taxing the co that owns the satellites who're based inside their jurisdiction. The basis for this was that the satellites constituted "moveable property" of the company (usually applied to calculate tax based on company assets like trucks etc.). If the company had moved out of the jurisdiction area then LA wouldn't have had any grounds for this in the first place, though thankfully it seems that the common-sense solution has been arrived at.

      At the risk of finding that my memory is flawed (and looking very stupid), I've gotta say; read the original story.

      • Your memory is correct. Florida tried to pull the same stunt with IBM, attempting to tax them on their global revenue because they had a plant in Florida. That brilliant initiative went away pretty quickly when IBM threatened to completely pull out of Florida and shut down their Boca Raton plant, putting all those citizens of Florida out of work. IBM did eventually close Boca a few years back. Kind of a bummer really, it was the birthplace of the PC and a beautiful site as well.
    • I think I am going to have to start a page listing all the ridiculously stupid posters of slashdot.

      Damn, you are stupid.

  • Beaurtrek! (Score:5, Funny)

    by Anonymous Coward on Friday September 28, 2001 @07:13AM (#2363033)
    These are the levies of the tax office Los Angelas, it's five year mission to seek out and tax new revenue sources, to boldly tax where no-one has taxed before!
    • "Live long, and Tarriff"

      IDIC - Infinite Donations, Increasingly Coerced

      "Scotty! Give me the fillings from their teeth!"

      "Dammit, Jim! I'm a mailboy, not an assessor!"

  • I'll be damned... (Score:2, Funny)

    by Anonymous Coward
    I thought the courts would allow tax on space, considering Microsoft isn't a monopoly.
    Hell - not only would the laws of physics fuck up in a black hole, the laws of tax would two.
  • A geosynchronous satellite stays more or less directly over some spot on the equator. I don't know if there's any international law/agreement on how high a country's jurisdiction extends. I suppose a country could at least claim that it exends up indefinitely.

    Of course, by those rules the U.S. would own part of the Sun every day...

  • Reminds me of taxing cables (Score:3, Interesting)

    by snatchitup ( 466222 ) on Friday September 28, 2001 @07:25AM (#2363056) Homepage Journal
    Reminds me of the court battle cities actually did win, that would allow them to tax any communications traffic going through cables laid within their jurisdictions. They were actually thinking about taxing per-square foot, as a way to come up with a "sensible" tax assessment, knowing full well they had no idea the value of the commerce flowing in the fiber, and copper.

    Killing the Golder Goose, for sure.
    • In this case, they're taxing infrastructure, which is perfectly admissible, if not standard practice. It's alot like collecting a toll to use a road.

      However, the case in question (satellites) does not involve infrastructure to even the slightest extent. Los Angeles does not own the space in which the satellite exists; they do not own any of the property used to support the satellite; and they certainly don't own the satellite itself. It seems to me that this type of case would be fairly cut-and-dry...leave it to the wonderful LA county judicial system to let it drag out for as long as it did...
      • OK....but does Los Angeles really "own" the land it lies on either?
        • well, technically, yes they do.

          the city of los angeles and/or los angeles county is able to tax any land within its city/county limits, correct? So in a sense, while they might not own certain individual lots or tiles of land, they still own the infrastructure that runs underneath it and over the top of it.
          • But why do they own that land???.....and if they own the land that LA resides on then why not the space above it?

            Somebody will have to own it someday....why not Los Angeles and why not now?

            who decides this stuff??? I think in the past we used to have battles over stuff like this.

      • Except that the company that did own the satelites was located within LA. It's standard practice to tax movable inventory in the home city/state of the owner. LA really got screwed on this one because it seemed on the surface to be too far fetched.
        • you're right...but in the same sense, does LA tax people for inventory that they hold in say, China? No, they don't...because they can't. It's out of their jurisdiction. So how could a satellite be IN their jurisdiction, if China is not???
          • But is the property in China a boat? A bus? A plane? A satelite? If it moves, it's fair game for LA, but not for China. At least under our rules, but China may always disagree. Tax'em twice I say.
      • I pay taxes on my car. doesn't matter where I keep it.
        • sorry for asking, but exactly what kind of tax do you pay for your car? Sales tax?? Title tax?? All of these things fit under the category "taxable items". A city can place a tax on a purchased item, if you purchased it in that city...likewise, a county/state can tax you if you want to hold the title to that vehicle, or be licensed to drive it..

          I fail to see the "parallelism" between your car and a satellite.
  • Maybe they will try to tax Australian residents for using the area beneath LA County, or even the satellites who use the space beneath them for that matter.

    Hehe I'd like to see LA PROVE that a satellite passed over head. They can't even catch half the people who run through the EZ Pass lanes in NJ!

    • Re:If you can't tax what is above you... (Score:1, Informative)

      by Anonymous Coward
      Hehe I'd like to see LA PROVE that a satellite passed over head

      This has nothing to do with whether or not it passed overhead. Please read first, post later.

  • OK, I know governments can tax whatever they want, whenever they want. But there's usually a reason. For example, property taxes pay for local amenities and police. Vehicle taxes pay for the upkeep of roads and traffic signals, and the building of new ones. Direct taxes such as income tax and corporation tax pay for lots of stuff, mainly public goods such as defence, civil servants' wages, etc.

    The other main use of taxation is as a disincentive to some activity or other (such as smoking and drinking, or in the case of fuel taxation, driving).

    Why tax satellites? The space they orbit in requires no expenditure to maintain, and there's no reason to try putting people off launching satellites, because it costs many millions of pounds/dollars.

    Apart from pure greed, what's the justrification behind such a proposal?

    • Re:Taxation... for what? (Score:1, Insightful)

      by Anonymous Coward
      I disagree with the tax, but I think you are wrong about your reasons.

      The space they orbit in does require expenditure to maintain. Space Command tracks all the debris in space and that costs a lot of money.

      I do believe the justification they had was pure greed. They were taxing the company every which way. They tax the corporate income, they tax the people working for the corporation, they tax the property they work on, etc., etc. etc.

      Clearly someone just thought why not. And the biggest reason why not is that the moment that gets put in place, the company will look at moving...hell, I'd be surprised if they haven't been looking already. California is not cheap.

    • Re:Taxation... for what? (Score:1, Insightful)

      by Anonymous Coward
      Apart from pure greed, what's the justrification behind such a proposal?

      Um, like you said about income tax, to "pay for lots of stuff, mainly public goods..."

    • Apart from pure greed,

      Pure greed? In the government? Now I've heard everything. :)

    • Re:Taxation... for what? (Score:3, Interesting)

      by Anonymous Coward
      OK, I know governments can tax whatever they want, whenever they want.

      no, they can't, as this story illustrates.

      But there's usually a reason. For example, property taxes pay for local amenities and police. Vehicle taxes pay for the upkeep of roads and traffic signals, and the building of new ones.

      "use" taxes build the price of roads into the use of roads and are thus economically efficient (the word "efficient" to an economist means "doesn't have economically harmful side-effects") because they don't "punish" unrelated sectors of the economy. An alternate way of thinking of it is, if roads are not taxed then they seem too cheap and people use them too much.

      Direct taxes such as income tax and corporation tax pay for lots of stuff, mainly public goods such as defence, civil servants' wages, etc.

      income taxes (corporate tax is largely an income tax) are used to transfer money from people who have it to people who don't, either directly through welfare, or indirectly by rich people paying the national defense bill for poor people. The reason for income taxes is somewhat complex, a mix of "tax where the money is" and the moral and reasonable notion that "we can't tax every piece of infrastructure efficiently, but if we tax income we are pretty sure of focusing on people who are benefitting from the infrastructure"

      The other main use of taxation is as a disincentive to some activity or other (such as smoking and drinking, or in the case of fuel taxation, driving).

      this may be the moral justification for those taxes, but economically it doesn't work. Demand for drugs and gambling is "inelastic" in that people do not reduce their consumption just because the price goes up. So, high taxes on these things are still efficient because they don't impact the rest of the economy by discouraging consumption. Fuel taxes don't really fall into this category in the long run, except that in the short run your demand for gas is dependent on a large capital purchase you've already committed to.

      Why tax satellites? The space they orbit in requires no expenditure to maintain, and there's no reason to try putting people off launching satellites, because it costs many millions of pounds/dollars.

      since the rest of your tax analysis was flawed, we wouldn't expect that you would get this part right... this tax is no different than property/excise tax. Property should not be taxed, of course, just income. But some property should not be treated differently than other property, either.

      Apart from pure greed, what's the justrification behind such a proposal?

      to an economist, "pure greed" is the same motivation behind every wage negotiation, every food purchase, every economic decision. Do you donate to charity? You do it because it makes you feel good, and your pure greed for that feeling makes you turn over a (usually moderate) portion of your wealth. Do you complain about the price of something that you just bought? You bought it because you wanted it more than the money you had, i.e. you thought it was a fair price that improved your property mix. It is only your pure greed that makes you complain.

      The flaw here is in thinking that "pure greed" is a bad thing: pure greed is a good thing, that perfectly normal human (and animal) desire to try to enjoy the next few minutes. Greed only irritates you when it is someone else's greed, and your own greed makes us want to allocate their resources: no skin off your nose, eh?

      • Don't you post that kind of stuff as AC again...
      • "to an economist, "pure greed" is the same motivation behind every wage negotiation, every food purchase, every economic decision. Do you donate to charity? You do it because it makes you feel good, and your pure greed for that feeling makes you turn over a (usually moderate) portion of your wealth."

        I was with you up to the second sentence of this paragraph. There is the minor problem that actual human beings are neither utility maximizers nor particularly rational. And even within the classical framework (a) there is no accepted way to measure "utility" so proof/falsification of these theories is essentially impossible (b) information and transactions costs are not zero, are often significant, and are usually not known or understood. With that complication much of what is "proven" in classical micro turns out not to actually apply in practice.

        sPh
        • minor problem that actual human beings are neither utility maximizers nor particularly rational

          Not an issue at all. In fact, the problem is presuming either to be the case in the first place. I understand that this makes textbook formulas easier to deal with, but we usually shouldn't attempt to mould and simplify data to fit formulas.

          there is no accepted way to measure "utility" so proof/falsification of these theories is essentially impossible

          While I will agree that it is difficult to quantify "utility", that does not negate the fact that it *is* the primary motivating factor involved in any decision.
          What we are dealing with is PERCEIVED utility. Any choice acted upon is a de facto reflection on the perceived utility by the actor. Any situation where volition is exerted, there is valuation of the expected outcomes, and the mere fact that one is selected over another is proof that it had a higher "utility" or value to the actor.

          Thus, the concept that utility must be measured in a context that is independent of the actor ("utility maximizers" and "accepted way to measure 'utility'") is necessarily flawed. So too is the notion that actors perform in a manner that is "particularly rational" -- if by "rational" you mean a framework that is independent of the internal process of the actor. (That is: The actor *believes* himself to act in a "reasonable" or "rational" manner. Whether or not it is either, is a non-related issue.)

          Human beings act in a manner they perceive to bring them the largest value. Every human action is based in selfishness. (I think this term better fits that "greed.").

          If it "is 'proven' in classical micro (but) turns out not to actually apply in practice" then there is a problem with the theory. Any theory which doesn't adequately predict results is fundamentally flawed and does NOT reflect the world it purports to make a knowledge claim thereof.

      • > > OK, I know governments can tax whatever they
        > > want, whenever they want.
        > no, they can't, as this story illustrates

        Erm... it was the government that made the decision to declare the tax invalid. A less sensible government might well have decided the other way. Governments *make* the laws, remember. That's why we vote for them.

        > this may be the moral justification for those
        > taxes, but economically it doesn't work

        In the case of addictive substances, no it doesn't work. But as you say, the policy-makers can use it as a powerful justification (moral highground AND economic sense to the uninitiated - NOW how much would you pay?) :)

        > Fuel taxes don't really fall into this category
        > in the long run

        Burning petrolium in vehicles is bad for the environment and for society - thus, it should be taxed appropriately. I don't own a car because it's too expensive. Many of my friends own cars, but often use public transport instead because of the cost of fuel. (I am in England, where fuel is taxed about three times more than in the US.) I think the categorisation stands up fairly well, myself. The more you hurt the environment, the more you should pay (whether the money should go to the Government is a different matter :)).

        > Property should not be taxed, of course

        No "of course" about it. Are you suggesting that indirect taxation is inferior to income taxes? In this country, the local authorities levy taxes on homeowners and businesses, in order to pay for local services (fire, police, landscaping, big cars for council executives, and so on).

        > The flaw here is in thinking that "pure greed"
        > is a bad thing

        Did I say that? No. You haven't answered my original question - what is the justification? Satellites are almost always a social good, and companies who have the resources to put them into space should not be discouraged from doing so. If they bring in revenue for a local company, then in all likelihood that revenue is being taxed somewhere else.

        Nope, still intact... :)

  • Space-related tax reform (Score:4, Informative)

    by zardor ( 452852 ) on Friday September 28, 2001 @07:39AM (#2363089)
    There are/(were?) a number of space related tax reform bills currently before congress, i.e.
    1) Invest in space now (of 2001)
    2) Spaceport equality act (of 2001)
    3) Zero gravity, zero tax act (of 2001)
    4) Space tourism promotion act (of 2001)
    5) The commercial spacepartnership act (inactive)
    Read all about it here [spaceprojects.com]

  • Most of you missed the point (Score:4, Interesting)

    by Anonymous Coward on Friday September 28, 2001 @07:44AM (#2363105)
    I don't think they were trying to tax the satellites just because they were occassionally overhead. I believe they were trying to tax the owner of the satellites as a corporation based in L.A. that owned property, regardless of where the property was located.

    Now, I don't know where Hughes corporate office is located. If it isn't located in L.A., then the tax assessor had no basis at all to attempt taxation. Their home page has a contact PO box in El Segundo, CA 90245-0956, but it doesn't say if they have even a branch there.

    Don't get me wrong. I am glad the tax was shot down. Satellites cost enough already without adding taxes. Got too many taxes already.

  • Well, that's good (Score:3, Funny)

    by Uttles ( 324447 ) <uttles AT gmail DOT com> on Friday September 28, 2001 @07:53AM (#2363133) Homepage Journal
    I was worried I'd have to start paying taxes on all my sats, you know how it is, first you buy a car, then a house, then a multi-million dollar satellite, and the government wants to stick it's grubby hands in your pockets every chance they get. Isn't it bad enough already that I'm paying social security and I could get 10 times the return by putting that money in a 2% savings account instead?

    Seriously, I think the federal government should be able to tax these sats because NASA and others are very important in the regulation of space and the coordination of all the objects out there (so these satellites don't go crashing into the international space center.) It should be just enough to pay for the work the federal govt. does, but it's ridiculous for some county to say "hey, we want some money, gimmie some money" just because they can. They have nothing to do with space travel so they should keep their grubby hands out of it.

  • No but... (Score:5, Funny)

    by Hard_Code ( 49548 ) on Friday September 28, 2001 @07:54AM (#2363134)
    "no go, the satellites don't get taxed"

    ...but they do get their own DVD zone. Can't have astronauts "pirating" DVDs (would that make them Space Pirates?).

    • Space is multi-region! (Score:4, Funny)

      by zardor ( 452852 ) on Friday September 28, 2001 @08:35AM (#2363247)
      Taken from a msgeek article [msgeek.org]:

      "Call the MPAA thought police! :P NASA is technically in violation of the Digital Millenium Copyright Act!
      According to this site [techtronics.com], NASA paid a region-hacking company in the UK for two hacked Sony FX-1 DVD players. This is technically illegal under the terms of the DMCA, as it thwarts a content-restriction scheme.
      It could be argued that the ISS is an international zone beyond the reach of US law and therefore DMCA doesn't apply. But NASA is a United States government agency and is bound by the DMCA.
      I look forward to what may happen if the MPAA decides to play hardball with NASA. This sounds like a terrific case to test the (un)constitutionality of the DMCA...bwahahaha!!! "

  • What kind of services do they provide? (Score:1, Funny)

    by Anonymous Coward
    So, if the satellite catches fire, will they send Johnny Gage, Roy DeSoto, and LACoFD Engine 51 [emergencyfans.com] after it? Are they going to send Sheriff Baca [la-sheriff.org] after some bastard who steals the satellite? What gives?

  • Big Consequences (Score:4, Interesting)

    by squaretorus ( 459130 ) on Friday September 28, 2001 @08:04AM (#2363158) Homepage Journal
    The fall out from this type of ruling is going to be felt quite heavily in coming years.

    We are currently taxed for driving, flying, building a home, playing with toys, eating anything non-essential and much more. Data is harder to tax, and so for the greater part we are NOT taxed for exchanging data.

    Governments tax for two reasons. 1: To pay for the 'stuff' of governing and providing public facilities to the country 2: As a penalty for anti social / environmental behaviours.

    As a greater proportion of our wealth is spent 'virtually' a greater portion of our 'real' expenditure will have to be taxed to ensure the books balance.

    Personally, I'd rather see fair taxes. Rich people exchange data (in the main) more than poor people. So tax us. Unpopular on /. I think, but if you think about it - would you rather be charged an extra couple of percent for your bandwidth or have propoerty taxes rise AGAIN!??
    • So, since I spend more time online, I should shell out more tax money to support those who refuse to get a job and support their own family and need my tax money to subsidize their housing and food? Great idea. Better yet, why not let their kids stay home from school too, so we won't have overcrowding?
      • Don't forget Al Gore's plan to use it to buy them computers and an Internet connection so they can surf with you, too.

        Every bit you make
        Every erg you bake
        Every breath you take
        Every move you make
        They'll be taxing you...

    • would you rather be charged an extra couple of percent for your bandwidth or have propoerty taxes rise AGAIN!??

      How about option three, a committee of Joe Public to ensure the government spends tax revenue wisely. You want a new stealth bomber, fine, you can use the regular hammers at Ace Hardware that we all use, the not the $400 uber-hammer. We want to spend $100,000 on microsoft excel licenses to you can have a spreadsheet. How about a free version that does THE SAME THING. Having worked as a government contractor for a few years, you all can rest assured that your tax dollars, however they are collected, are being pissed away . I'd rather not get into what they spend the money on, more that they spend it efficiently when they've made up their minds. Sorry for the rant, but I'm a firm believer that the government can fulfill it's duties to the american people without raising taxes....

  • How wide a jurisdiction does the state of california have anyway? I mean, hell, if they can put a tax on satellites that are nowhere near their landmass, and which are moving by at thousands of kilometres per hour, how much longer till:

    a) They move Washington DC down there so its grasp truly can exceed its reach, and

    b) They start taxing tour busses and airplanes.

  • There should be a global tax for satellite launces, rather than satellite orbits to be spent on environmental projects. A huge amount of environmental damage is done by launching rockets into space (but then the americans here wouldn't know about the environment, would you?).

    Such a project might also refocus the minds of the international community away from police states to combat terrorism (which might one day wipe out the human race) back onto environmental damage (which certainly will).

    • I agree 'They Should' tax the launches, re-entries, and those who build satellites, 'They Should' pay a 100% income tax rate. That will do 'it' - what ever 'it' is. The fact is that most commercial launches are done by non-american companies with Europe leading the way of course. North America is also a net exporter of oxygen if you want to get picky, so if you want to clean the environment, look in your own back yard first. I've lived in four different countries in my life, 15 years in Europe and 20 years in North America. Every time I go back to visit friends or family in Europe I smirk when I see those grey scummy buildings coated in soot, and lakes and rivers that could be classified as fire hazards.

      • Its true that europe launches a large number of satellites and the tax should apply to all(like I said).

        If you look at the CO2 emissions figures, you'll see that Europe really isn't the issue at the moment. America's emissions dwarf it (and are set to go even lower by 2010).

  • I am starting a tax shelter where we will send all of your property into space to keep the fed from taxing it...

    Soon we will come up with a plan to let you get it down as well. ;-)

  • I wouldn't mind seeing politicians made subject to the California Air Purity laws.

    You just have to remember that most of the hot air comes out of the mouth, for testing purposes.

    I can somehow imagine what it would look like in a testing center.

  • A few years ago, NASA decided to launch several spare TDRSS satellites even though they weren't really needed yet to replace the ones we already had on orbit.

    Why? Because it cost more to keep them in storage on earth than it did to launch them and keep them on standby.

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