AU Productivity Comm says unblock AU and stop rewarding DRM holders in grave!

[pwalker8]

Originally Posted by HarryT

You don't get the choice of whether to pay it or not. In the UK at least, the assessed tax is taken from the estate before the residual value is distributed to the heirs, and I believe the same is true in other countries, too. The executor of the estate would end up in court charged with tax evasion if the inheritance tax were not to be paid.

I remember reading an article talking about the tax issues for Prince's heirs. I find the idea that people owe taxes on sometime before the money is earned rather counter intuitive. I would have thought that you pay taxes on the actual value of the estate and then taxes on the royalties when they come in, not what someone thinks the future royalties might be, but hey, here in the US, the IRS is judge, jury and executioner with regards to taxes, so they get to make up the law as they go.

Of course, each country has it's own tax laws.

[Terisa de morgan]

Originally Posted by HarryT

You don't get the choice of whether to pay it or not. In the UK at least, the assessed tax is taken from the estate before the residual value is distributed to the heirs, and I believe the same is true in other countries, too. The executor of the estate would end up in court charged with tax evasion if the inheritance tax were not to be paid.

I'm afraid it's the same in Spain. Your only option for not paying is to reject the inheritance.

[HarryT]

Originally Posted by Terisa de morgan

I'm afraid it's the same in Spain. Your only option for not paying is to reject the inheritance.

Yep. In which case it all goes to the government.

[darryl]

Originally Posted by howyoudoin

Exactly. The reason we have these long copyrights existing beyond the life of the creator is that the 'creator' has been lobbyed into existence as an entity who cannot 'die'.

Corporations are why authors and the like have been treated differently to other regular Joe professionals.

Semi-relevant question: Most countries charge inheritance tax for properties passed onto heirs. Do the heirs of a copyright have to pay inheritance tax?

It seems to me that, to relate long copyrights to the goals of copyright we have discussed here, such copyrights would need to act as a strong incentive to authors and inventors. This of course could only happen if such long copyrights increased the amounts that authors/inventors receive from them. After all, if the author signs the contract today and dies tomorrow, in most countries the publisher has at least 70 years plus one day to exploit the rights. However, legacy publishing was set-up in such a way that nothing like a proper value is paid. Normally there was some sort of advance and a low royalty rate unfairly calculated. To receive any royalties, the book had to earn out. The use of this terminology encouraged the belief by many that Publishers did not make any money until a book earned out. In fact, nothing could be further from the truth. This in turn lead to the argument by some that if a book did not earn out it was because the advance was too high. Again rubbish, as I understand that most books never "earn out". Usually because the system is designed this way. Another element of legacy publishing which has been mentioned in this thread is the fact that most of the money made on a book was made in the first few years after release. Legacy publisher's of course assumed this, and what they were prepared to pay, usually as an advice, reflected this assumption. But they still wanted the copyright for the whole of its term, despite the payment to the author being based on the exploitation of the work for only a few years. If the book exceeded expectations it would earn out and the author would get the low and badly calculated royalty rates. And of course, books would go out of print and be promoted or not at the discretion of the publisher, not the author. This is why, for instance, Hugh Howey talks in his latest blog post about working in a bookshop before his literary success and speaking with guest authors who were NYT best sellers still working a day job. Only the really elite authors (based on sales) were able to escape this trap and actually make some real money, either through the sheer volume of sales or because they were able to negotiate fairer contracts or both.

Now, with the advent of ebooks, books never go out of print. Nor, do I think we will find, that they continue to make most of their money in the few years after publication. But of course, legacy publishing advances not only fail to reflect this. Anecdotally they have declined drastically. Royalty rates still fail to reflect this new reality, though there is some public discussion, and even the Authors Guild asked nicely for an increase, though stopped short of taking out a full page NYT ad. How royalties are calculated in these contracts and the unfair provisions including reduced royalties in various scenarios is receiving less attention, but has not changed.

The only conclusion I can reach based on the above is that in general legacy publishers payments to authors do not and probably never have reflected the length of copyright. Instead, I speculate that such payments reflected a very limited projected economic life for the books in question. Thus the ridiculous copyright lengths we now see are not justified by the public policy goals the US constitution sets out.

[crossi]

How can royalties earned after the author is dead encourage him to write more? A ghost author?

[John F]

FWIW:

"What Happens When an Author Dies?"

http://www.thepassivevoice.com/2011/...n-author-dies/

[HarryT]

Originally Posted by John F

FWIW:

"What Happens When an Author Dies?"

http://www.thepassivevoice.com/2011/...n-author-dies/

Interesting, thanks. This is the part of interest to this discussion:

The value of the copyrights a deceased author owns will be included in the author’s taxable estate.

The fair market value of copyrights is based upon their income producing potential, discounted to present worth. A general rule of thumb used by estate tax experts for computing fair market value of a copyright is to calculate the average annual earnings of the copyright over a 5 year period then multiply that annual amount by a number usually falling between 3 and 7.

For example, if a copyright earned an average of $100,000 in each year during the 5 years prior to the author’s death, the fair market value of that copyright for estate tax purposes would range between $300,000 and $700,000 depending on factors such as the length of the remaining copyright term, the prior uses to which the copyright was put, and the likelihood that income from those uses would either increase or decrease in the future.

However, it also notes that, in US law, the first $5m of an estate is free from inheritance tax, meaning that very, very few people pay it. In the UK, by comparison, the amount is £325,000, meaning that many people who own a house will be liable to it, given rises in house prices in recent decades.

[murg]

Originally Posted by crossi

How can royalties earned after the author is dead encourage him to write more? A ghost author?

The ensure that their family is taken care of.

[howyoudoin]

Originally Posted by murg

The ensure that their family is taken care of.

Implying the rest of us don't have families that need taking care of

[eschwartz]

Originally Posted by HarryT

However, it also notes that, in US law, the first $5m of an estate is free from inheritance tax, meaning that very, very few people pay it. In the UK, by comparison, the amount is £325,000, meaning that many people who own a house will be liable to it, given rises in house prices in recent decades.

There is a Federal tax and a State tax -- the article says only for the Federal tax is the first $5m free.

US != UK our laws come with Added Redundancy.

[John F]

Originally Posted by HarryT

Interesting, thanks. This is the part of interest to this discussion:



However, it also notes that, in US law, the first $5m of an estate is free from inheritance tax, meaning that very, very few people pay it. In the UK, by comparison, the amount is £325,000, meaning that many people who own a house will be liable to it, given rises in house prices in recent decades.

For 2015, the U.S. federal exemption was $5.43m.