Thanks for these summaries!
Casual chat this week where we revisited some big ideas around the Tragedy of the Commons & taxing for open source.
Let me clarify the “taxation” part since it’s a little broad term, and it’s been a while since I mentioned the “open source tax” here.
The question is how to finance the open source ecosystem if we recognize it as a new type of public good.
The idea is to introduce a dedicated tax to proprietary software sales on top of “value added tax” (or “sales tax” in the US). So, each time a consumer purchases licensed software, they also pay this extra tax on top of the sales price. Then, ideally through a transparent public fund, the collected taxes should be distributed back to the open source ecosystem to generate steady revenue.
For 1% open source tax, the invoice should look like this:
This approach makes it a two-way relationship with the actual market, where the open-source ecosystem constantly contributes. There’s nothing optional, voluntary, or random. If the market performs well, the open source ecosystem grows and vice versa.
I want to study the numbers on how much revenue open source tax could generate globally and per country, but to give us an idea, one figure I found after a quick search:
The global business software and services market size was valued at USD 429.59 billion in 2021
The purpose of introducing such a tax is to solve the investment coordination issue (a.k.a tragedy of the commons), something the individual consumers cannot achieve. And our long-term plan should be to expand the open source ecosystem as much as possible (maximize freedom and innovation), hence why we need to pull such a big gun.
In other words, we should aim to build an environment where it’s normal for any regular (software) company to contribute to the open source ecosystem/digital public goods and generate revenue from it.
There are many details to cover about this scenario, but I wanted to explain the basic structure.