Media Blog

A Good Piece on the Radio “Performance Tax”

Jerry Bowyer has a good piece today on on the “performance tax,” a royalty that the government would impose on certain radio stations and then redistribute to record companies.  An excerpt:

A friend of mine in the radio business called me recently to ask what I think about the “performance tax” issue. If you are a regular listener to talk radio, you’ve probably heard ads decrying a plan to impose a “tax on radio.”

In essence, it is an imposed royalty; the government would force radio stations to cut a check to an entity, which would send those funds to record companies. A government board of Copyright Royalty Judges would send the check, as opposed to a negotiation between the businesses themselves. Most of the money would go to the record companies that distribute the music, not to the songwriters and singers who created the music.

The law would not cover everyone, including DJs in public venues, restaurants and bars. But large commercial radio stations would pay a lot; the Congressional Budget Office estimates that short-run costs would be around $70 million, and without knowing where the government will set the royalties, it’s impossible to calculate how high that number could rise. Oddly enough, Public Radio would pay only a token amount for the use of the music.

So what do I think about this? I told my friend, “I’m for free markets and property rights.”

“Yeah, but some of the Republican congressman who have signed on to this idea are saying that this is property rights,” he said.

I found myself wondering if any of these men and women who have taken an oath on the United States Constitution ever read the thing. The power to create copyrights, patents and other forms of intellectual property protection is granted to the Congress in Article 1, Section 8, Clause 8 of our Constitution.

Read the rest here.

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