The president of indie label trade group The American Association For Independent Music (A2IM) issued this statement today arguing against New York state’s proposed tax on digital music sales:
“The A2IM board and members of our community are very concerned about the effect this tax would have on all members of the music community. While A2IM understands the need to shrink the state’s budget deficit during this time of economic recession we feel taxing the music industry is the wrong answer.
Due to changes in technology, the music industry has already been faced with declining revenues for a prolonged period of time prior to this financial crisis, due to consumers’ shifting to the illegal acquisition of music. The reality is that this tax will probably not be paid by either the consumers buying music online or retailers of the music, as the pricing of music can not be increased. Instead, this tax will need to be absorbed by those least able to afford it, the music labels that have already experienced long periods of unprofitability . Otherwise, any change in prices may very well increase the level of consumer non-paid illegal acquisition of music, as too many music consumers already wrongly feel that free acquisition of music is a legitimate alternative.
At a time like this, where large components of the manufacturing and service industries have moved outside of the United States, the need to support the creators of intellectual property and the companies that invest in it here in the United States has never been greater. This tax would have the exact opposite effect and should not be enacted.”
Others in the music industry are expected to join the effort to fight the download tax.