Is it possible that current accounting/tax law can be interpreted so that these are viewed similarly?
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...
[1]: https://qz.com/460482/heres-what-your-stolen-identity-goes-f...
[2]: http://www.businessinsider.com/heres-how-much-your-personal-...
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.
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.
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.
If someone tried to do that to me, I’d report the attempt to the company lawyer, and I’d doubt the quality of the thing they were selling was as good as the quality of the thing the other poster was advertising.
Now that’s not allowed in most places, plus you need to hire fancy salespeople to deliver those gifts.
Sometimes you can prod your potential customers into action.
This is well understood by the adtech community and even the flashy new "ABM" companies will tell you the same. 3rd party data is universally terrible. At best, it'll work at scale (of millions) on general demographic details but will definitely not recognize 1000 people on the open web.
That kind of list might work on Linkedin or Facebook with email targeting but it would be easier to focus on niche trade sites without any data, or just use a direct sales team. That $1.5M in data you're paying for would have much better ROI with a good VP of sales.
I feel like you're arguing that dirt is worth as much as the farm that one could build with it.
Alternatively you need real criminal gangs - dozens of people willing to walk up and down a London street withdrawing 5k at a time from a 1000 Pre-prepared cards and put the money in their rucksacks. They don't come cheap. And its still cash and still in the U.K.
Get Amazon to send you two dozen laptops to the same address with two dozen cards. All as "gifts". Yeah right. Now you gotta sell them - fences run at 10% if you are lucky.
The lowest effort are simple impersonation for loans, but still you have to take the money and move it somewhere. Into cash? Into the phillipines? See above problems. Open a credit card account? How to intercept it and the PIN number sent by post?
All in all, it's actually pretty darn hard to take personal details and monetise at the "real money" level. These things stop being scalable. You could probably fund a student lifestyle off any combination of the above but millions - not really.
Cf interesting Microsoft paper on this a few years back
These criminals trade data because it makes them money, otherwise there wouldn’t be much of a makrket.
Sensitive personal data is necessary but not sufficient to rip someone off. And if you want to try to make a living ripping people off, there is even more business overhead, making the cost of sensitive personal data an even smaller portion of overall operational costs.
From the point of view of the thief, our personal data is a vital but cheap input into an operation that tends to have very high security costs, viciously expensive liquidity issues and terrible personnel problems, among other more quotidian business headaches.[1]
I suggest trying to think like a crook now and then. Trying to try on other people's lives is a useful way of shaking up one's thinking habits, empathy (don't confuse with sympathy) is always useful, and it can help you keep yourself more secure.
[1] I am leaving out things like several potential fates far worse than bankruptcy and related issues because they aren't opex-related, but they probably do effect retirement planning.
In any situation, potentially derived value is not taxable. A car is worth whatever a car was bought/sold for, not including some hypothetical such as whatever I could make by driving it for Uber/Lyft. What matter's here is what will actually occur in the transaction. If Equifax chooses to sell its data, that income will be taxed at whatever price Equifax chooses to sell the data.
Note this doesn't change that your "gift" of peanuts of data is not taxable because (a) your data alone isn't worth squat, (b) even if it was, you got something in exchange for it.
Also, it doesn't matter that there's an exchange happening. Sales tax and income tax are assessed on fair exchanges of goods, services, and currency.
And if you grow oranges on your property that you never sell, you never pay taxes on those oranges.
If you accept a trade-in on the sale of a vehicle, the allowance for the trade-in cannot be excluded from the amount on which tax is based.
For example, if you sell a car for $20,000 and accept a trade-in valued at $4,000 as partial payment, tax is based on the $20,000 selling price.
Still though, the example is a good one. You're trading your data for a service. There isn't anything to tax.
If we agree in a truly free society then collecting and monetizing metadata should be illegal. If we don't mind giving up that freedom then there's nothing wrong with companies creating a profile on you and tracking you no matter where you go and what you do. But the internet has spoken and we're gladly, albeit unknowingly, giving up any right of protection. I find it worrisome to think of what society will be like in another 50 years if nothing is done to curtail the fleecing of user data.
It's kind of like arguing a bank would never create fake accounts because the risk of doing so is too large.
I bet LinkedIn does.
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.
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.
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.
Obviously this is a silly thought exercise but it is fun to think about.
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.
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.
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.
Yet we manage to sell IP (or just some intangible right to use it)
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
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.