#FOSSBack: Di Luong, @tarakiyee, @shiro & @ramyraoof
– Funding FOSS
Most interesting session of FOSS Backstage over funding open source software with panelists from three public funds. And quite interestingly, there were two other tax-related questions next to my #OpenSourceTax question.
1/8
https://www.youtube.com/watch?v=5LhvSq9yq_A&ab_channel=PlainSchwarz
19:10 - Miriam Seyffarth from Open Source Business Alliance (Rephrased): Many companies profit from the open source ecosystem without contributing back, which creates an unfair outcome. How can we push them to contribute? Do we need some kind of an open source tax?
24:54 - My question: What do you think about adding a 1% open source tax to proprietary software sales, similar to value-added tax, to generate constant revenue for the ecosystem relative to the size of the software industry?
2/8
30:49 (Rephrased): Could the government give companies tax benefits to make sponsoring open source software financially attractive (which is another idea that I also favor 💯)?
Thanks to the panel for sharing their valuable insights; I appreciate the feedback. That being said, let's clarify some details. 👇
3/8
- How should the #OpenSourceTax be implemented?
The idea is to introduce a dedicated tax to proprietary software sales on top of value-added tax (VAT) (or sales tax in the US); each time a consumer purchases licensed software, they also pay this extra tax on the sales price.
4/8
As an example, if the product price is €100 and VAT is %21, with a 1% open source tax, the consumer purchasing proprietary software will pay €122 instead of €121, and that extra 1 euro will go to public funds like Sovereign Tech Fund to finance the open source ecosystem.
5/8
- Why do we need an open source tax?
The main goal is to simplify the economy around financial contributions for the open source ecosystem. Without the tax, we will still expect thousands of companies/consumers to contribute financially or engineering-wise. However, the contributions will remain random and unorganized (a.k.a., the Tragedy of the Commons).
6/8
A dedicated tax aims to address this coordination issue and generate steady revenue for public funds and, therefore, for the open source ecosystem. It also ensures the size of the funding will be relative to the size of the software industry, compared to a fixed and arbitrary budget.
7/8
Open technologies and other digital public goods have tremendous social and economic value for society. However, we must develop a model to finance them to maximize that potential. My humble view is, on one side, we need scalable public funds. And in the long term, we must also answer how to generate steady revenue for these public funds.
There are numerous details to cover, so please let me know if anyone wants to discuss these ideas; I'm happy to chat anytime ✌
8/8
Serkan Holat