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[IP] more on open source tax credit





Begin forwarded message:

From: Dana Blankenhorn <dana@xxxxxxxxxx>
Date: March 18, 2006 3:13:22 PM EST
To: dave@xxxxxxxxxx
Subject: Re: [IP] open source tax credit

http://blogs.zdnet.com/open-source/?p=597

An open source tax credit?
Posted by Dana Blankenhorn @ 10:25 am
Digg This!

John Irons and Carl Malamud (right), both fellows at the liberal Center for American Progress think tank, have developed a proposal they call the Open Source Tax Credit.

The idea is that corporations can write-off their work developing software in many ways, but individuals can't. And they should.

While I hate to look a gift horse in the mouth, I think this thing is mis-named. Corporations developing open source tools can already get the write-offs. The problem Irons and Malamud are addressing is that individuals can't write-off their research time, regardless of whether they are writing open source or proprietary code.

Where open source may come into play is where you decide to create a company to gain those write-offs from your work in open source. You can't claim to run a company if all it does is lose money.

But is that really a problem? Doesn't the open source business model work for everyone? After all, if you get some consulting income or freelance work because of your open source development efforts, having a corporation would let you shield that money from taxes, making your time a cost of doing business.

Corporations are cheap to create. There are folks in Nevada who create them for a living, and you need not move there to get the benefits. (No state taxes, either.)

So is this a solution in search of a problem? Or does this idea make sense to you?


On 3/17/2006 7:37:02 PM, David Farber (dave@xxxxxxxxxx) wrote:
> Begin forwarded message:
>
> From: Carl Malamud <carl@xxxxxxxxx>
> Date: March 17, 2006 11:37:38 AM EST
> To: dave@xxxxxxxxxx
> Subject: open source tax credit
>
> Hi Dave -
>
> Perhaps of interest for IP.  A proposal for an "Open Source Tax
> Credit."
>
> Blog posting is here:
>
> http://thinkprogress.org/2006/03/17/open-source-tax-credit/
>
> Full economic analysis of the proposal is here:
>
> http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=1468377
>
> Regards,
>
> Carl
>
>
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