<story><title>Hungary plans new tax on Internet traffic</title><url>http://uk.reuters.com/article/2014/10/22/uk-hungary-internet-tax-idUKKCN0IB0RI20141022</url></story><parent_chain><item><author>sz4kerto</author><text>Some background.&lt;p&gt;- the proposed rate is 150 HUF&amp;#x2F;GB, that&amp;#x27;s around 0.5 EUR&amp;#x2F;GB or 60 cents&amp;#x2F;GB.&lt;p&gt;- the internet speeds in Hungary are relatively high, it&amp;#x27;s quite common to get 100 Mbps for $20&amp;#x2F;mo&lt;p&gt;- the minimum wage is around 250 USD&amp;#x2F;mo, the average net wage is $650&amp;#x2F;mo&lt;p&gt;- the levy should be paid by the providers, but probably they&amp;#x27;re going to be able to deduct it from their other taxes, that means profitable companies won&amp;#x27;t pay, currently non-profitable companies will&lt;p&gt;- the tax will be capped per subscription, the cap is rumored to be around $4 for individuals and around $25 for companies -- but most households have 2-3-4 phones, cable internet, etc.&lt;p&gt;- it&amp;#x27;s very likely that this is going to wipe out the currently loss-making telcos that can then be bought by the state (nationalized) and their assets funneled to cronies (even there was a public bid for the assets nobody would start a new company as it&amp;#x27;d be making losses in the beginning therefore they could not deduct this tax from their taxes -- so it&amp;#x27;d result in even more losses)&lt;p&gt;Also, it&amp;#x27;s very much likely that this is a deliberate distraction from the political conflict between the USA and Hungary that has emerged last week. (Edit: it&amp;#x27;s still bad though, as a journalist put it, it&amp;#x27;s like spraying pepper in the eyes of a pitbull: it&amp;#x27;s distracting, but you might end up in a really big trouble.)</text></item></parent_chain><comment><author>netcan</author><text>The problem is not necessarily directly the tax, but the barriers and bureaucracy around it making the whole industry less dynamic. $4 per household is not in itself terrible. The cronyism is also a concern.&lt;p&gt;The reason policies like this are viable politically is because public policy economists are far more comfortable estimating the direct effects of a tax than they are estimating some of the murkier, but nonetheless inevitable implications. 1st year microeconomics students learn to draw the supply and demand curves, draw in the price after tax and calculate lost consumer surplus and profits. It&amp;#x27;s core economics material.</text></comment>
<story><title>Hungary plans new tax on Internet traffic</title><url>http://uk.reuters.com/article/2014/10/22/uk-hungary-internet-tax-idUKKCN0IB0RI20141022</url></story><parent_chain><item><author>sz4kerto</author><text>Some background.&lt;p&gt;- the proposed rate is 150 HUF&amp;#x2F;GB, that&amp;#x27;s around 0.5 EUR&amp;#x2F;GB or 60 cents&amp;#x2F;GB.&lt;p&gt;- the internet speeds in Hungary are relatively high, it&amp;#x27;s quite common to get 100 Mbps for $20&amp;#x2F;mo&lt;p&gt;- the minimum wage is around 250 USD&amp;#x2F;mo, the average net wage is $650&amp;#x2F;mo&lt;p&gt;- the levy should be paid by the providers, but probably they&amp;#x27;re going to be able to deduct it from their other taxes, that means profitable companies won&amp;#x27;t pay, currently non-profitable companies will&lt;p&gt;- the tax will be capped per subscription, the cap is rumored to be around $4 for individuals and around $25 for companies -- but most households have 2-3-4 phones, cable internet, etc.&lt;p&gt;- it&amp;#x27;s very likely that this is going to wipe out the currently loss-making telcos that can then be bought by the state (nationalized) and their assets funneled to cronies (even there was a public bid for the assets nobody would start a new company as it&amp;#x27;d be making losses in the beginning therefore they could not deduct this tax from their taxes -- so it&amp;#x27;d result in even more losses)&lt;p&gt;Also, it&amp;#x27;s very much likely that this is a deliberate distraction from the political conflict between the USA and Hungary that has emerged last week. (Edit: it&amp;#x27;s still bad though, as a journalist put it, it&amp;#x27;s like spraying pepper in the eyes of a pitbull: it&amp;#x27;s distracting, but you might end up in a really big trouble.)</text></item></parent_chain><comment><author>pentium10</author><text>internet speeds in Hungary are not so high. Look at east Romania what offers, you get 1GBps for 7 euro&amp;#x2F;mo.</text></comment>