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Can Infonomics be a taxing proposition? I wonder.

Nadhan on ‎04-04-2013 11:34 AM

It’s that time of the year again. United States residents are filing their annual tax reports. We compute the taxes that ought to have been paid, make additional payments or receive refunds. We apply the nation’s laws to determine the appropriate taxes for the sale, purchase and possession of assets.


As I go through this exercise myself, I am thinking about the most valuable asset in the enterprise—Information. This post on Infonomics beginning at home projects financial value being associated with data that we "own." Will this very data become a taxable asset in the future? I wonder.

Big Data 1040.png

Gartner Research VP, Doug Laney originated the concept of Infonomics – the principle of applying Economics to Information.


In this post on a new definition of ROI (Return on Information), I discuss the concept of using a formula highlighted by Dr. Michael Wu, Ph.D., Principal Scientist of Analytics at enterprise blog platform provider Lithium in a recent piece in TechCrunch. The formula suggested for computing ROI associates a financial value be associated with this most valuable asset.


So what are the taxation implications as they pertain to information? I wonder.


1. Generation. When I engage in social media channels, I am providing data that can be informationalized to profile my personality. Interested businesses can turn this into valuable financial information by applying it with context. Should such value realization be a taxable act? I wonder.


2. Possession. Enterprises have the ability to possess massive amounts of information about diverse customer segments — is this equivalent to possessing physical assets, such as real estate? Would there be tax implications as a result? I wonder.


3. Trade. Big Data shares its thoughts in this post on associating value with personal information where it references HP Senior Fellow Huberman’s paper on A Market for Unbiased Private data. Huberman explains the various models that address a wide spectrum of varying mindsets on how much data costs consumers. Is the sale and purchase of data, therefore, a taxable transaction? I wonder.


4. Informationalization. Havard Business Review blogger Thomas C Redman introduces the concept of Informationalization – a more holistic approach to realizing information from data with context – resulting in a significant appreciation in value. Does this translate into proportional taxation? I wonder.


5. Charity. If I contribute information to charitable organizations, which use that information to do good for the human race, am I entitled to a deduction? Will doctors providing their geographical location information to charitable organizations be entitled to a tax deduction in the event of a natural disaster? I wonder.


Taxation is a delayed act after there are well-defined mechanisms to understand and estimate the value of the asset concerned. I don't anticipate any immediate repercussions in the short term. But then, all assets with a tangible financial value are good candidates for one kind of taxation or the other.


If so, why should the most valuable asset be treated any different?  I wonder.


How about you? What are your thoughts likely to be on this topic? I wonder.


Connect with Nadhan on: Twitter, Facebook, Linkedin and Journey Blog.




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