First,
Do not put levies on material.
Add a surtax to the registration of ip address or some such.
This makes sense because the money will not be used
to placate intellectual property owners,
but rather to promote developpement of new material.
The music industry is threatening a decline in material produced
to justify their bottom line.
The intermediaries are not required or even needed to create what they call “content”.
Disregard their faulty and self-interested statements.

Second,
Do not try to equate downloads (or uploads) with levies to be distributed to all “worthy”.
Such a goal is extremely difficult, fruitless and well insane.
Instead, create an agency to promote development of new art
by, for example, offering prizes according to a scheme of popularity
weighted by a review of worth by peers.
Thus, you reward artists for their contributions and encourage them
to create more art, which is what this should do.
Prior art “rights” accumulation into monopolies are ignored, dejected and rejected since they are not relevant to the issue of CREATING quality art.

Third,
A proportionnal constant value for the tax is provided based on the bandwidth available and/or used.
You use real actual values used to back the internet backbone
and to determine how much to charge for ip address, bandwidth, etc.
So, for an extremely unthough of example to show possible mechanism,
but not to show an actual implementation:
Say you have access to a T1 connection.
You pay a low flat rate for your bandwidth potential (including redistribution), potentially based on the cost of ip address registration.
Then you pay a low flat rate proportionnal to the average bandwidth you use.
The idea is to reward creation of art, not to make a system of accounting to simulate a large amount of non-existent sales.
You do not want to strenghten monopolies,
you wish to encourage artists.

Fourth
Since you are not placating the middle man,
but rather promoting local artists,
you do not need to control the source and type of material swapped.
Let other countries do as they will with their citizens since
your laws do not apply there.

The plastic music sites selling all the same product obviously
do not live in reality with their flat overcharged prices.
And what you get is a crippled, limited “product” wich you specifically
cannot use for what you want without asking permission to the monopolistic music industry.

Try to sell hammers by forcing people to use your proprietary nails
that you overcharge and that are limited in availability.

With the availability of source material freely distributed,
new markets open to provide a _better experience_ not only to provide
the art but also to integrate it better together and to provide support, merchandise…
And guess what?
The labels do not get to choose who has the right to provide services.
Wich can only help competition and free enterprise.

The point is, if the legislations does not represent the people’s belief
of what is just and right, they will not change the people.
The people will change the legislations.

And to those who wish to manifacture belief
by bullying the schools into brainwashing students,
you should note that resistance increases with insistance.

Also remember that the children eventually grow up.
And if they are upset, it might be because someone tried to control them.

In closing, there are always solutions.
You just need to find one that works for you.
If you do not find a solution, you need to search further, not give up.

Hmmmm, I don’t believe this for a second. If the copyright holders weren’t greedy bastards taking an unfair portion of the royalties, jacking up the price, it would be a whole lot cheaper!