8 ms·

Alternatively, if it's truly an asset, can it be taxed as an asset? If I give a company a car, that is taxed. If I give a company my data which is worth more th

• fny 9y ago
  Using the black market as a standard, your identity-related information isn't worth enough to be taxable.[0][1][2] The more common data you give away is worth even less. Your "gift" is akin to giving away a few grains of sand to a glassmaker who provides a free grain counting service. Now let's say you dumped a lot sand that we could value at $10K. Any smart sand-counting glassmaker will claim his once "free" sand counting costs $10K, which amounts to an equal, zero-profit trade. [0]: http://www.bankrate.com/finance/credit/what-your-identity-is-worth-on-black-market.aspx http://www.bankrate.com/finance/credit/what-your-identity-is... [1]: https://qz.com/460482/heres-what-your-stolen-identity-goes-for-on-the-internets-black-market/ https://qz.com/460482/heres-what-your-stolen-identity-goes-f... [2]: http://www.businessinsider.com/heres-how-much-your-personal-data-costs-on-the-dark-web-2015-5 http://www.businessinsider.com/heres-how-much-your-personal-...
  • bendews 9y ago
    It is when you have 3B records
    • fny 9y ago
      If one company sells anything to another company, that sale is taxed as income like any other sale. So yes, if Yahoo sold 3B records, that would be taxed, and the recipient company can choose to book that purchase as an asset on their balance sheet and will likely expense the purchase. Hell they could even choose to depreciate the value too for as long as they follow GAAP. OP mentioned his data alone, which isn't worth squat unless the transaction says otherwise. Meaning, if OP sold his data to a company for a taxable amount, he would be taxed on that income.
      • Alaina66 9y ago
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  • deleted 9y ago
    [deleted]
  • soared 9y ago
    Value is derived from user data when its used to target ads. Black market data is never used for that purpose, so its value is much lower. (A company would never take the risk of using black market data)
    • manigandham 9y ago
      Value is derived from the potential application of data. Ads as an application isn't worth much since you can still be shown ads just fine without any personal data targeting. Black market data is worth way more because it's often more personal than just demographic markers and interests, and can potentially lead to large sums of money.
      • soared 9y ago
        Well no that's incorrect. A targeted ad is worth significantly more than one without targeting. I buy ads at a $0.25 cpm and a $40 cpm, the only difference is targeting data.
        • manigandham 9y ago
          You can still show the ads and there are a lot of other signals and context to use. Also other than Facebook or google with strong identity, 3rd party data on the open web is next to useless. If you’re paying $40cpm for data, you’re getting ripped off.
          • soared 9y ago
            Sorry to be that guy, but: I spend over $5m a year on rtb ads. I literally spend 50 hours a week doing this. If the money I spend doesn't produce verifiable results, I lose it. For example, that 40cpm is to reach a pool of <1000 users who are in charge of purchasing for networks of hospitals, and my ads are for MRI machines. 3rd party data is unbelievably valuable, probably $1.5 million of my budget goes to data costs alone.
            • 9y ago
  • rhizome 9y ago
    "None of us is as [valuable] as all of us," is a saying that has been around for decades, surely there are business rules that have cropped up to support a valuation of this scenario in the meantime.
    • fny 9y ago
      I'm not saying anything different. Whenever a business/individual sells information at a value, they'll be taxed on the sale, just like anything else. OP mentioned selling a cars worth of his own data, which doesn't exist.
  • katastic 9y ago
    I think you have it backwards... Wouldn't black market identities be worth MORE if they weren't so easy to get? So the more we tax / regulate it, the harder it is, the more valuable they get. Win-win for everyone.
    • fny 9y ago
      > Wouldn't black market identities be worth MORE if they weren't so easy to get? No. It's already illegal to buy and sell identities, so black market demand for identities is likely at a maximum already. I'm just using that number as a proxy for what your clicks on the internet must be worth. I'm basically making the assumption that Value(Clicks) < Value(Black Market Identity), which I'd say is a fair bet. > So the more we tax / regulate it, the harder it is, the more valuable they get. Win-win for everyone. Again, this wouldn't be true for black market identities, but let's look at clicks. What I'm saying is that the click you give a way is worth too little to be taxed at all. Say 1M click data points is worth $1K (which I think is still very generous given the amount of noise) that means each click is worth 1/10¢. Any company that sells the 1M clicks to another company will pay taxes on the $1K of income. So if you increased taxes, you would discourage them from selling your data to another company. This doesn't change your behavior though as a consumer. You still give away an untaxable 1 click at a time (1/10¢): which is not taxable as a gift because of the size of the amount (even 1K clicks is only $1) and because the company can easily argue they provided you with a service in exchange for that 1/10¢. What you're looking for is a way to penalize companies for receiving data (i.e. for every data point you gain, you owe some $x in taxes.) This would need to be legislated since that's not currently how tax law works.
• iamthepieman 9y ago
  Does that mean that your ID number (social security for U.S. readers) is taxable upon receipt (birth or immigration)? Also we will need a birthday tax as your age (a key demographic data point) changes then. A marriage tax, moving (address change) tax, employment change tax etc. Tax law will have a concept of taxable data event much like a liquidity event. Obviously this is a silly thought exercise but it is fun to think about.
  • late2part 9y ago
    Careful there tiger. You're starting to sound like a Sovereign man with your corporate federal account.
    • iamthepieman 9y ago
      I do not know what any of that means. Googling it led to a bunch of conspiracy sites and equally incomprehensible shady semi-legal advice and advocacy sites
      • IncRnd 9y ago
        late2part was saying that your chain of thought mirrors the conspiracy sites that you mention.
• Romanulus 9y ago
  Stunning... How badly do you really want to be a tax-serf?
• gigatexal 9y ago
  That’s a fascinating premise. Revenues generated from the use of ones data is taxed like anything else (unless routed through Ireland ;-) ) but I don’t think assets are taxed at rest. I could be wrong.
  • SilasX 9y ago
    Indirectly, they are. Governments don't let you blow all your profits on assets that are as-good-as-cash, and then claim you didn't make any taxable profits. So if you make $X in profit and then use it to buy a tractor, then (from the government's perspective), you've just swapped $X for an asset worth $X. No change in book value, no reduction in profit, no reduction in tax liability. You are, however, allowed to treat the tractor as an expense that's distributed over several years of its useful life, which is called "depreciating" it. So yes, to the extent that your cash is exchanged for assets, that counts as a higher book value and higher tax liability (than if it were a pure expense). I don't know if you'd have to treat a "data purchase" more like a tractor or more like buying electricity (a pure expense) though. My previous, longer comment on the constrains of the tax code and how it results in needing the concept of depreciation: https://news.ycombinator.com/item?id=15060604#15061439 https://news.ycombinator.com/item?id=15060604#15061439
    • IncRnd 9y ago
      > Indirectly, they are. Governments don't let you blow all your profits on assets that are as-good-as-cash, and then claim you didn't make any taxable profits. Similar experience here: In an earlier career my company reinvested all profits back into growth, only to learn that the taxman didn't care about such silly things. The IRS demanded the tax from the profits that had been reinvested and were no longer available. Plus they wanted the tax from the profits of the growth that had only happened from reinvesting the earlier profits that they wanted tax from. Their demands were in excess of the actual realized profit that had been made by the company.
      • gigatexal 9y ago
        That sounds like a bug. File a report and maybe a pull request. If only it were that easy.
• anonu 9y ago
  The asset concept is interesting. If you introduce taxes into the mix then you will also need to value your asset. If you sell your asset then you need to record a fair value price for which you bought it and when... that way you can record a short or long term capital gain. The problem with digital assets is that you can easily copy them. So what does it mean to sell an asset which you actually still own/have a copy of. Its a bit tough to conceptualize - but I think there's something there... requires a bit more brainstorming.
  • saimiam 9y ago
    > actually still own/have a copy of Record companies forced plenty of DRM related BS down our throats to drag us into a "license not own" rental model. I suggest we return the favor.
  • tarsinge 9y ago
    > So what does it mean to sell an asset which you actually still own/have a copy of Yet we manage to sell IP (or just some intangible right to use it)
• matt4077 9y ago
  > Is it possible that current accounting/tax law can be interpreted so that these are viewed similarly? Yes, that actually happens to be the status quo. A collection of data is an intellectual property asset just like a patent, or movie rights, or your brand. If you buy a database, you will, depending on the costs, have to deprecate it over its useful lifetime. That means your tax burden in the first year will be higher than if you blew the money on the company Christmas party. That's the same as if you bought a software license, or Coca Cola Co. If you collect the data yourself, that mechanism doesn't kick in. The reason is that it's difficult to value intellectual properties' value unless they're traded, and it would allow for too much manipulation of a company's profits. Now these assets aren't taxed on an ongoing basis in the way you imply. That's because no assets are, except real estate in some jurisdictions.
• cvsh 9y ago
  The problem is you aren't "giving" a company anything. The company is observing how you interact with their products. This is like saying by walking into a store you are "giving" the company your image on their security camera. It would take a very odd definition of "gift" to make that claim.
  • theobon 9y ago
    Sure there is some data companies are collecting of that form but typically it isn't Personally Identifiable Information and even when it is that isn't what people are worried about with the Yahoo breach. Yahoo was "gifted" data. People explicitly gave them names, email addresses and passwords. That is what Yahoo failed to protect. > The stolen information included names, email addresses, phone numbers, birthdates and security questions and answers.