Property

Standard

There are few things more contentious than the question of property. For those on the far left, property is theft. For extreme conservatives, it is a sacred right. Most of us come down somewhere in the middle. In Canada, while we guarantee the equality of the sexes in the Constitution, we don’t guarantee the right to own property. The state can – and frequently does – expropriate property for the public good and there are a number of other less formal ways that your property rights can be infringed.

In fact the biggest property owner in Canada is the Crown, which controls vast tracts of land from coast to coast to coast. In most situations, the Crown continues to own subsurface rights to land even if the surface rights are owned by individuals.

For artists and other creative types, the big issue is copyright – that is, the right to own the product of their mind and imagination. In Canada, copyright persists for fifty years after the death of the creator; in the USA, those rights extend for 70 years and there are some – notably big creative corporations like Disney – who would like that extended even further.

The simplest argument people make is that if they own a house they can pass that property down to their children and grandchildren and so on in perpetuity so why shouldn’t intellectual property be the same. Property is property right?

Well, no. We already distinguish between different kinds of property. There is real property, generally referring to land but can also be ascribed to other forms of wealth, and there is chattel property, things like cars or the furnishings in your house. This distinction becomes particularly relevant when you go bankrupt, when most chattel property is forfeit (unless it is the tools of your trade) whereas some real property (such as your primary residence) can’t be touched.

We also make a distinction – in the tax system – between different kinds of real property. Primary residences are exempt, for example, from capital gains tax. Some lucky folks who bought a house in downtown Toronto in the 70s are now millionaires because of soaring house values. When they sell, none of that money is taxable. Not so the people who own a cottage on Georgian Bay (unless it is their primary residence); their property is subject, on sale, to taxes on the difference between the purchase price and sale price.

And, finally, you can only pass down your property when all estate taxes (in the USA) or probate fees (in Canada) are paid. Failure to pay those and your property can be forfeited to cover the cost. As far as I know, probate may (or may not) be applied to intellectual property but it is difficult to estimate its value and hence ascribe a percentage tax or fee to it.

There are some arguments against extending rights to intellectual property beyond a reasonable limit. Extending patents (which are different and shorter than copyright) for drugs for example may – at a certain point – raise prices for consumers without significantly increasing innovation by pharmaceutical companies, which would rather spend their R&D on modifying existing properties than inventing new ones. The same suppression of creativity may well apply to other forms of copyright as well.

And that’s ten minutes.

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