Hungary Internet tax cancelled after mass protests | Hacker News Reader

Hungary Internet tax cancelled after mass protests

bbc.co.uk

358 pointsdan123467 comments

Cancelled, well not really. The PM Orban's reaction was the following:

- the tax cannot be introduced given the current reactions.

- people question the rationale behind this whole thing

- the whole argument went off track

He also said that they'll start a "national consultation" about the topic. Now a "national consultation" (invented by them a few years ago) means that they send out a paper via snail mail to every citizen who is eligible for voting (around 8 million out of 10). The questions are phrased manipulatively. We won't see a clear question like "Would you like to pay this tax YES/NO" option. It is usually it is phrased in a form like "Some people think this thing is good because blblablabla, while others think this is not that good because blablabla". Now it is always phrased in a very manipulative way and contains biased arguments. I mean arguments (i.e. campaigning) on the questionnaire itself.

Then of course no one controls or oversees the processing of the collected questionnaires. So it looks like a referendum but it's a plot device, a persuasion device to show fake support. The result can (and will) be manipulated, interpreted at will by the government.

The guy in charge of the 'consultation' is Tamas Deutsch, who previously called the protesters stinky bugs (while he also didn't agree with the idea of the tax). Also, FIDESZ (Orban's party) regularly and outrageously censor their FB page. They delete opposing but polite comments, ban users.

This happened to me after the first protest when their reaction was that they are open to arguments and discussion but reject vandalism (two windows of their empty HQ were broken by 5 people). I made a try. Posted 2 comments, got banned (comments deleted).

(edit: formatting)

So while it is a major result for the people in Hungary, it by no means is a final victory.

For most people who were protesting this proposal was the last straw and what you can't see from these posts that people were saying "Orban get lost!" and "Down with the corrupt government!" during those events. People started talking about a much needed referendum to get rid of Orban and his corrupt retinue so after the first protest this started to be about much more than the internet tax. This momentum is broken now since we got what we wanted initially. We'll see what happens next.

Indeed, that might be why, but I didn't think he was particularly worried about public opinion at this stage. Maybe it's next year's election looming? Still, I'm concerned about how that's going to go.

I have family members over there. I've Heard Stories about Viktor Orbán. I've made sure they have an emergency exit strategy if things go any further south.

Do you have any articles you would point to that describe the governmental machinations? You pose this as a part of a larger arc, and I'd love to see more effort done to make it clear what that arc is, what this is a part of.

I did a little digging around for articles on the 27th (as that wonderful picture of the protests made the round, https://twitter.com/RyanHeathWriter/status/52740681179280588...). I ran into Slow and Steady: Hungary's Media Clampdown which seemed a reasonable enough job at illustrating that this isn't just a vie against the internet or a vie for revenue, it's part of a longer programme very deliberately creating Soft Censorship, and installing new undemocratic ways for the politicos to grab onto power.

https://www.ifex.org/hungary/2014/07/28/slow_steady/

There is also the erection of a monument in Budapest implying that Hungary did not comply with the Nazis (bordering on Holocaust denial, iirc).

Krugman has reposted several entire articles on his blog by Kim Lane Scheppele on the rising authoritarianism in Hungary: http://krugman.blogs.nytimes.com/?s=hungary&_r=0

Is it me or we entering a new golden age of authoritarianism?

Unlike in the last century, this time around it's not under the guise of nationalism or communism, but in representative democracies where the executive branches consumes greater and greater power, while weakening the well-vetted and centuries old safe-guards that were in place to prevent power-abuse.

Whenever the states sky-rocketing growth in power is questioned by the media or the citizenry the leaders can point to the fact that - hey it's still a democracy, you voted us in. So the populous is placated and ignorant to the fact the democratic process has been made impotent.

I disagree.

Many democracies around the world are admittedly flawed, but regardless, a larger portion of humanity today lives in democratic countries than anytime in history.

Large, powerful, democracy. Pick two.

You can have a powerful democracy with a small number of constituents because then an individual has a realistic capacity to rally his neighbors and make change when something sour is going on.

You can have a large democracy when the government's power is strictly limited to a small well-defined area of influence, because then most constituents can realistically remain informed about that specific area of influence.

You cannot have a large, powerful democracy. A large democracy with many powers can't resemble a direct democracy because constituents can't realistically remain informed on so many issues. But it also can't resemble a republic because that forces voters to choose between e.g. the party that promotes censorship and the party that promotes police militarization, without sufficient influence to affect the position of either party.

The problem is that more and more of the things people describe as "democracies" are large and powerful.

Thinking about it, http://en.wikipedia.org/wiki/Sortition would probably be better than democracy in this case, though even that is not free of problems.

"centuries old safe-guards"

That's not the case in Russia, Hungary, and China.

A couple off the top of my head:

Gov't nationalizing private pension funds (=stealing): http://www.ipe.com/nightmare-in-hungary-as-government-nation...

Corruption scandal over tobacco stores (where shops were required by law to get licenses, which were then awarded to friends and family): http://blogs.ft.com/beyond-brics/2013/07/01/hungarys-tobacco...

You can also Google MediaLaws, nationalization of other key industries such as parking meters, the constant rewriting of the constitution (modified more often than I push to Github), the 9(!) year appointment of a friendly Chief District Attorney, and most recently the 3000 Billion HUF deal (15B USD) w Russia to construct nuclear power plants that reeks of corruption.

US has also started banning some Hungarian VIPs, something that's typically reserved vs Russians... http://www.reuters.com/article/2014/10/20/us-usa-hungary-idU...

Why do taxes always have to be so artificial?

The reason to have income tax is to have people who can afford it contribute to society. I can see how that is a good thing.

The reason to introduce an internet tax is what? To only have people who make enough money use the internet? What kind of nonsense is that?

Please, let us agree that whenever a new tax is introduced, it is justified.

And perhaps lawmakers should ask system/OS programmers for help, because they actually can come up with good and fair rules to make complex interacting systems work as they should.

I think the internet should be a series of dumb pipes for the sake of open connectivity and unencumbered sharing of information. A dumb pipe shouldn't care what the interacting system built upon would be. But obviously others disagree.

Trade in goods is simple and trade in services aren't that much more complicated. Taxes can be fairly easily taken from these. But intangibles like information and its transfer through cable is still a matter of debate. The pro-tax group, I'm sure, think it can easily be squeezed into the "services" camp for taxation, but data isn't that simple. A gig of files isn't the same as a gig of streaming video, but they decided to avoid the problem altogether and stick to taxing by bits. A silly move.

As much as I agree that the internet should be as free as possible, all technology has negative externalities that we should not ignore, and good policy can solve. Do we want pedophiles unencumbered access to the internet? Nope, but we also don't want the effort to block them to block the things we want.

That's very true. It's the freedom vs. chaos dichotomy that all societies have to struggle with at one time or another. As for pedophiles, I believe this is the domain of real world social services. Abuse doesn't occur in a vacuum and there are always signs to look for, both in schools, with friends and the local neighborhood.

Of course, competent workers in social services and an adequate budget in this field are other troublesome subjects, but I do believe no crime takes place online without a real world component. Therefore, there should be real world clues to follow.

Good point that stopping pedophiles from using the web won't stop pedophiles. It's that kind of global view of these things that we need more of, and I suspect was missing when this tax-bandwidth idea was put together.

> Do we want pedophiles unencumbered access to the internet?

Why do you care? If they are online, preferably drawing pictures of young children or something, it gives them an outlet to their fetish that does not involve violently assulting children.

In a grayer and probably more nihilistic tense, even if they share already produced child pornography, all those violent assults have already been performed in the past. If it can stop future assults by giving pedophiles material in the now to sate their lust, then restricting it is just enabling more child rape because they don't have alternative outlets.

Seriously, at this point, it is all just ones and zeroes. And those don't hurt people. It is an injustice and terrible on the part of any rape victim to think lewd imagery of themselves is circulating the Internet giving pedophiles an opportunity to get it off, but it already is. And nothing we do can put the cork back on all the child porn already circulating hard drives around the world. They just use VPNs, TOR, and other anonymizing services to hide their activity that puts up a barrier to entry to less technically inclined pedophiles who then vent their frustrations out on people in the physical realm.

Let them do their thing in a dark corner of the Internet, that is still public and in the open, that is highly scrutinized by law enforcement to immediately catch and arrest anyone that commits new injustices against children, but it direly harms the potential of a free Internet to dictate policy due to the exception.

In the same vein of thought, the Internet enables terrorists and for hire murders to collude and plan violence against others. But you can do that in person. The thing with the Internet is that it does not enable anything you could not do standing next to someone - you just get information exchange anywhere. And if you cannot restrict information exchange in person, then restricting it digitally does little good and only stymies the potential of the Internet.

"The reason to have income tax is to have people who can afford it contribute to society."

I don't think this is why we have income tax. All taxes are artificial. They're artificial rules inserted into the natural market, like how we put a bit into a horse's mouth so we can influence it's behaviour. I think the better question for any tax is: are we putting the bit into the horse's ass? It seems to me this proposal to tax bandwidth was more like that; it's just bad policy.

Income tax is the exception to that. We tax income not to change behaviour but to not change behaviour; if we need x amount of revenue, a progressive tax on income is the way to collect that that has the least impact on the populace.

Taxation is about plucking the goose so as to get the most feathers, with the least squawking. Nothing more. So the goose squawked, and they backed down.

Then why do we tax consumption and capital as well? I agree with you but feel it's more a balancing of policy to manage the complex mix of our intentions as a society.

We tax consumption because it's easy to collect, and also sometimes to discourage some types of consumption, like alcohol, tobacco or gas.

Capital is taxed in small number of countries (which is in my opinion unfortunate). However, most countries tax capital income, and if one agrees that taxing regular personal income makes sense, one should also tax capital income.

"if one agrees that taxing regular personal income makes sense, one should also tax capital income."

I don't see this as logical, because agreeing that it makes sense has nothing to do with whether it's effective or not.

Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. I'm not saying we have it right, but that it's really very complicated.

Not taxing capital gains does wonders for concentrating wealth on the rich and ultra-rich.

> Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term.

This is really true of all taxes. The tax money comes out of someone's pocket and that person may have otherwise invested the money or done some other economically productive thing with it.

> Taxing capital gains reduces the amount that can be allocated into generating new wealth

So does taxing any other form of income. Preferentially low taxes on capital gains favors wealth accumulation by people who already derive income from capital and, at any given present revenue level, relatively disfavors wealth accumulation by people who derive income through means which are more heavily taxed, notably labor income.

I didn't mean to suggest only capital taxes incure opportunity cost, you're right that all taxes do. I have been thinking lately as well that we have probably shifted to taxing labour too heavily, but as it is really complicated, Im sure there's a lot that I don't know that I don't know.

There is nothing in your comment to support your claims. You claim an exception to a rule but provide no argument to support this exception. And then say that the largest revenue producing tax in the U.S. has the least impact on the populace.

Two aspects one might consider when designing a tax is to make sure that it affects each person slightly, so that it won't be worth it for them to protest against it from a cost-benefit standpoint (which also means spreading the tax over as large a population as possible), and to ensure that it can be collected efficiently, that it is easy to enforce and hard to evade it.

Such an internet tax can be considered actually pretty good from these aspects: assuming it is capped (as was announced after the initial uproar) its fairly small compared to the cost of the subscription, and it is essentially collected by the ISPs, who already have the billing mechanism set up and need either licences for the frequencies they use for mobile internet, or right-of-way for the cables they use for the wired internet service and thus can easily be coerced by the government to collect this tax. (for example, income tax will be collected much less efficiently, due to tax evasion, etc.)

Of course, another aspect is what behaviour the given tax will reward / punish, and from this viewpoint such a tax (in any form) is catastrophic, but these two aspects can a lot of the "artificiality" of certain taxes.

England has levied a 'window tax'[1] on the mainland and a 'salt tax' in India[2]. The latter lead by a long route to independence. We also experimented with a poll tax[3],[4] on a couple of occasions with interesting consequences. Income tax with some progressive banding seems reasonable and a tax on consumption (we call it Value Added Tax as it tracks up the supply chain) is generally accepted, or at least not protested against.

[1] https://en.wikipedia.org/wiki/Window_tax

[2] https://en.wikipedia.org/wiki/History_of_the_British_salt_ta...

[3] http://en.wikipedia.org/wiki/Poll_tax_%28United_Kingdom%29

[4] http://en.wikipedia.org/wiki/Peasants%27_Revolt

Also, the Stamp Act, that triggered the US independence (or at least was an important part of it):

http://en.wikipedia.org/wiki/Stamp_Act_1765

Don't forget "broadsheet" newsletters (caused by another tax).

There is nothing natural about an income tax. However, personal income is a relatively easy thing to tax. Land-value or real-estate-value is also easy to tax, because it happens in the open.

I think taxes are an infringement on freedom; but society needs taxes in order to fund the essential features of government that secures freedom, so I tolerate them.

To that end, "total taxes are too high" is an entirely separate argument from "we are taxing (and therefore discouraging) the wrong things."

Something has to be taxed. As people communicating online we are biased to think taxes on internet traffic are wrong, but dispassionately I don't see much of a difference between taxing traffic and taxing gas (and boy do drivers hate gas taxes). You can argue that gas taxes fund the roads that are being used, but the internet is not entirely self-funded by private enterprise.

Why did you not address a key point of the comment you were replying to, which was that income taxes allow taxation to correlate with how well one is able to carry the burden? It would be nice (and helpful to the overall signal-to-noise ratio) if we all here talked to each other rather than at each other.

Two points on the topic of gas taxes: (1) While it is perhaps still true that the internet is not entirely privately funded (is it?), I'd be interested in actual numbers. Most likely, the public spending on cables is ridiculously tiny compared to the public spending on roads. (2) In some (many?) countries, gas taxes are also justified by environmental and sustainability concerns: they provide an economic incentive to reduce fuel consumption. I don't see a similar concern with mere bandwidth usage. An environmentalist may bring up the power consumption of data centres, but that is a slightly different issue: bandwidth used does not always correlate with compute power used, and so it is still no justification for an internet tax.

Well gas taxes, as I understand them, are also there to help stabilize the prices of gas, to remove some amount of uncertainty in the average consumer's life.

As for "funding the Internet", no part of the Internet is publicly owned in Hungary, is it? So the Internet in Hungary is self-funded by private enterprise, right?

If Hungary offers a public Internet service, then these Internet taxes actually make perfect sense. That's actually a great way to fund a national backbone provider, I'd like to see something like this implemented in the US, if the voters are for it, of course.

In theory, this is correct.

It seems in the US, it's used as punishment for making money.

When a new tax is introduced, it's justified? I would really like to see where all of my tax money is going and why there never seems to be enough.

It seems in the US, it's used as punishment for making money.

How is it so?

When high income taxes in US were being introduced around Great Depression era, it was indeed argued by politicians that some fortunes are estates are so large to be immoral. However, after Reagan cuts, taxes in the US have been pretty low, and it is hard for me to grasp how one could see them as a punishment.

> "The reason to have income tax is to have people who can afford it contribute to society. I can see how that is a good thing."

This argument justifies all taxes that a person can afford, which makes the reasoning here obviously wrong. The exact same reasoning applies to an internet tax, a premium toilet paper tax, or a smart phone tax.

Taxes are not justified solely because people can afford them or because those taxes contribute to society. Taxes are justified on an economic basis and on that basis alone. When pooling money under government control according to some distribution scheme results in greater economic output (accounting for all externalities) than would be produced by the same money used for solely private purposes, then and only then is such a tax justified.

The near impossiblility of assessing the relative utility of each approach is why individual taxes are largely a political debate rather than an economic one.

As you seem to already know (but I find saying it explicitly help conversation), the purpose of taxation is government income. Taxation has a side effect of dissinsentivicing that which is being taxed. As a simplification, suppose income is only acquired through labor. In this case, taxing income is equivalent to taxing labor, and therefore dissinsentives labor. If we could transfer some of this task to something that we are more okay with dissinsentivizing (such as pollution) then we should do so. We could also view the dissinsentiving as a way of reducing usage of some government funded service and thereby reducing costs. For example, the gas tax is effectivly a tax on road usage. In this perspective, taxing is similar to the government charging for a particular service. Of course, given either of these perspectives, and internet tax is still stupid.

The reason that income tax is generally preferred is that it allows much more government income without effective incentives significantly. This is because the marginal utility of money seems to decrease, so for a linear increase in 'utility-payment' laborers receive a super-linear amount of money; and we can therefor tax it progressively while maintaining a constant incentive burden. This is a clear case a price-discrimination which is far from "natural" in a pure economics sense of the word.

As the saying goes, the art of taxation is to pluck as many feathers from the goose with it flocking away.

So in practice, governments will try to tax anything that's "easy" to tax -- i.e. generate revenue while not making people protest, flee, or hide it in the black market. So you see a lot of taxes on heavily monitored, hard-to-hide, hard-to-do-without stuff, like fuel, real estate, cars, and income.[1]

There isn't much logic to it beyond, "hey this is an easy way to get revenue". And in this case, it got unusual blowback.

With that said, the political support for a tax is indeed governed by considerations of justice or "who should pay", and in this case, the answer came in the negative.

[1] Not everyone owns cars or real estate, but they use them in some way.

Last time the proposed tax was posted [1], a lot of people thought it was a distraction from Hungary's international relationships -- specifically its increasing reliance on Russia.

[1] https://news.ycombinator.com/item?id=8491882

It doesn't seem wise to give people against you a reason to rise, gather, be visible and reward the protest with a decision reversal. Now you can expect similar demostrations whenever you step the line.

Or people feel satisfied with the cancelled tax and the energy for protest is safely released.

Most of the protesters were civilized and informed. A few aggressors threw hardware at the windows, but I wouldn't say the overall tension against the Hungarian government has diminished.

Peopling gathering and protesting before decision makers with the expectation of change isn't something new, every protest is a little revolution, and they go back as far as history. So giving people a personal issue to protest can be a pretty fair tool to distract them from other problems at greater scale.

Dooes Hungary's Government needs to distract it's people? that is another question.

The difference between some protests and a revolution is listening to the people so backing down was a wise decision.

If he wouldn't have backed down it could have easily turned into a revolution I'm certain this is not the only cause of people gathering in the streets it's just the last straw.

The law was foolish but backing down was a good choice.

This is a great example of a badly informed leader that doesn't understand this "internet" thing trying to squeeze more tax money out of its citizenry.

Never attempt to tax or regulate something you don't fully understand.

That doesn't make a lot of sense unless there was some news released during the period of the tax which they wanted to bury. The denial of entry of a few people to the US doesn't really seem like it would qualify.

Maybe they signed TTIP and I didn't notice...

I'm Hungarian and I can assure that this move is a beautiful temporization from our government. They proposed this tax to herd the attention from the 'banning scandal'.[1] And now from one moment to the other, they are heroes. [1] http://www.reuters.com/article/2014/10/20/us-usa-hungary-idU...

An internet tax? That sounds like something that the Australian government would conjure up [1].

[1] http://www.smh.com.au/federal-politics/political-news/secret...

That's not an internet tax as much as full surveillance over the internet. I'd take a tax over that any day.

It's actually both - surveillance and we will have to pay for it

USA law is the Patriot Act which EFF dot org says is used mostly for 'low level' drug caes and not the intended targets. Cyprus. redacted

Hungary needs a reason to monitor and peek at you. So, a small tax. Famous USA gangster Al Capone never convicted for murder, but he was convicted for evasion of tax laws.

Allegedly some say the laws were passed just for the famous gangster.

Why did the USA invade in the middle east? Supposedly the 'internet forgery' Italian letter, which would be taxed by the HUNGARY INTERNET TAX.

Technical question: What happens if there is a DNS hijacking on the country level like before? Or some high bandwidth sent from the botnets to YOUR PERSONAL COMPUTER?

Pay up Hungary because that RUSSIAN 'assistant sofware' makes for high bandwidth. The video cassete manufacturers will make sure that HUNGARY NETFLIX dies an early death.

Pay up Hungary!

What were the politicians thinking when they decided to tax the Internet?

one possible explanation is that it was just a communication trick, to make people talk about this instead of the corruption scandal which resulted in government officials being banned from entering the US.

http://blogs.wsj.com/emergingeurope/2014/10/17/the-us-cancel...

To distract the public opinion from talking about high priority officers being forbidden from entering the USA.

The technique is known as smoke&mirrors.

Probably they were just searching for things that don't have some extra tax (above the already existing %27 VAT), and they found this weird Internet thing on that list.

Also today the PM said:

"We need to find an answer to the question where the giant extra profit made on the Internet goes and if we could keep some of it in Hungary."

Something quite interesting in the article is that it was intended to be a telecommunications tax and ended up being perceived as an internet tax.

In some countries there are already telecommunications taxes/duties that would also be 'internet tax'

I guess the phrasing can be a big deal.

Hungary already has a separate telecommunication tax paid after every minute of phone calls and every sent message (SMS or MMS). The telco providers (T-Mobile, Telenor and Vodafon are the three major players here) were supposed to pay this from their own profit without making the customers pay for it, but that is of course not how the market works. The current proposed internet tax would be based on the amount of data transfer.

Tax the things that have an associated social cost, like fast/low nutrition food.

Please reconsider that in light of the fact that the tax is government income: they will categorize everything they can - even some vegetables and fruits, I bet - as low nutrition food and fast food.

At the same time, you don't want to tax things that are disproportionately consumed by the poorer members of society.

This already exists in Hungary: http://blogs.wsj.com/emergingeurope/2011/06/22/hungary-to-ta...

I am surprised that US government has not got this tax idea before Hungary. After all only rich people use Internet more while the poor and welfare dependent people dont use much of internet.

One of the very few times that protesting was effective.

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