Death of the internet middle class

There have been fears, there have been warnings, but now that the soft brown substance has finally hit the ventilator, let’s take a step back and take a look at the bigger picture. The bigger picture – actually, the biggest one – is that one of the best ideas in the history of humankind – if not THE best – is in danger of dying from strangulation by bureaucracy.

There are dozens, probably hundreds, possibly even thousands of texts on the internet supplying reliable data[1] so I’ll just continue with my summary and assessment.

As of January 1, 2015 any internet business is obliged to calculate and pay VAT to the buyer’s country, in the amount dictated by that country,  even if said business isn’t located in the EU.

Furthermore, to prove where the buyer is, the business needs to be able to present “two non-contradictory pieces of information”, whatever that means. Usually, it is believed that one of those pieces of information is the buyer’s IP address, while the other may be his or her own claim when filling the form.

Of course, there are some internet payment services which do not supply the buyer’s IP to the selling businesses (in some countries it would even be illegal), while the buyer’s data in the supplied form may also consist of anything he or she believed would be hilariously funny to put in at the moment of filling out.

In some cases it is not completely clear what the third source for finding out the buyer’s country may be (the rule demanding “any two” sources implies there may be more).

To add burlesque to parody, this data needs to be “kept and stored for 10 years”.

The problem is, obviously, that the EU consists of 28 countries, most of them having different VAT rates, some even having different rates for different types of products. Without a central database that would monitor all those VAT rates – the central EU administration data site actually claiming that “countries may change their VAT rates without prior notice” and that the “data may be outdated up to six months” – it is painfully clear that, to track all this, any business would have to form an investigative department similar in size to the Pinkerton’s Detective Agency to be able to track all the VAT rates and not break any the EU regulations.

Big businesses, of course, do not really have a problem here. Y’know, being big, and already having a shitpile of employees and large profits they will have zero problem managing the consequences of this novel EUrocratic quirk.

However, imagine a two-person internet company in the business of e-books publishing. Two things come to mind. The first is “mission”. The other is “impossible”.

There are many examples and quotes from various places on the internet of how people are trying to cope with this disaster, but everywhere the story is the same: small businesses are being put on hold or, worse, shutting down completely. Which is the most obvious thing in the world and would have been the most obviously easy to predict consequence if anyone in the Bruxelles crystal palaces had actually bothered to think about real-life implications of what they were going to dictate.

The problem is, they hadn’t. This opens up another question: what will they think of next? If those grey-suited anal-retentive halfwits with their heads firmly stuck inside the fat books stuffed with paragraphs that they – obviously – can’t grasp themselves (as has been revealed in many Q&A sessions regarding exactly this particular new system), what other area of life is going to collapse because someone didn’t do their job?

It is becoming more and more apparent that the internet-based middle class is on the verge of being wiped out and/or devoured by the Big Ones. Careers are going to end, markets are going to be monopolized and the plurality of ideas and products will be greatly diminished.

In addition to the looming prospect of what might happen when these bureaucrats move on to their next target, this could become a contributing factor to the already strong centrifugal forces that threaten to tear apart the European Union itself.

The fact is, although some really have a hard time comprehending, once you lose the middle class, you’ve lost the economy. With the internet middle class on their way out, it is a matter of time when the unplugged section – the bigger, fatter, more juicy prey – will become the next victim.

This could, in the end, cause the collapse of the one of the best ideas in the history of humankind: the European Union, and, at the hands of the very people who are supposed to service it.


[1] Here are some sources, for quick reference:
http://euvataction.org/key-facts/
http://www.julietemckenna.com
http://www.cheryl-morgan.com
Independently publishing ebooks in the UK – what’s changed since 1st January 2015?

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