Can New Chicago Taxes On Netflix, Apple, Spotify Withstand Legal Challenges?

Mr D from 63 writes: Today, a new "cloud tax" takes effect in the city of Chicago, targeting online databases and streaming entertainment services. Residents who stream movies and music from companies like Netflix and Spotify will now need to pay an additional 9% tax. This also applies to Chicago businesses that pay to use databases online. Chicago expects to collect $12 million a year as a result of the new tax ruling. From the 24/7 Wall St. story: "Also worth noting is that the city’s tax ruling in both cases avoids the issue of whether there is a close-enough connection (nexus, in legalese) to require providers like Netflix or others to collect either tax. International law firm ReedSmith weighs in on this point as well: '[O]nce the Department begins to audit and assess customers located within the city, many of those customers are likely to demand that providers collect the tax going forward. As a result, many providers will likely feel the need to register to collect the taxes, despite lacking nexus, and despite having strong arguments against the Department’s expansive interpretation of its taxing ordinances.'"

Comments

Taxes

[Anonymous Coward]

Legalized theft.

You want what someone else has, and you're willing to steal it at the barrel of a gun.

Fuck you.

Re:Taxes

[Anonymous Coward]

Move to Greece. Hardly anybody pays taxes there, and everything is GREAT!!!1

Re:Taxes

[penix1]

Meanwhile Mr. AC I am sure you are one of the first to scream when the government doesn't provide the services you think they should provide. Remember, there is no such thing as a free lunch!

Re:Taxes

[penix1]

And even then it is not free. Lots of hoops to jump through. Far more than the corporate welfare system we have.

Re:Taxes

[Anonymous Coward]

What services did the city of Chicago provide that Spotify and Netflix make use of to serve content to customers?

Re:Taxes

[AK Marc]

Netflix isn't being charged or collecting the tax (yet). This is a Use Tax, which has been ruled legal 100 times before (perhaps hyperbole, perhaps not). This just clarified the long-used Use Tax to include digital services. The customers use Chicago, so they owe.

Or more specifically, Netflix content travels over Chicago right-of-way.

Re:Taxes

[KingMotley]

What if I live in Chicago, but only use netflix while out of state?

Re:Taxes

[alvinrod]

You can't have no taxes and a government that wants to promise the world at the same time. Low taxes are fine if you have a government that isn't spending anything on programs and by the same token if you have a government that has or wants to have a lot of policies and programs, it is going to need to have a revenue stream to support them.

Re:Taxes

[itsenrique]

Give me a break.

Re:Taxes

[AK Marc]

Chicago will probably say you owe, but you'd likely win in court, if you chose to fight.

Re:Taxes

[GrahamCox]

People really think like this? Really? I'm sorry for you. Somehow, you've been brought up to be a sociopathic moron.

Life is better when people cooperate and look out for each other. That's what has made the human race so successful as a species. If that's not your experience, again, I'm sorry for you. However, if you expect people to look out and care about you, then you have to look out and care for them, at least just a little. And in the modern world that means that you pay taxes.

You might feel that your taxes are not well spent, or that they only end up in the pockets of the corrupt, or the already well-off. That's obviously bad, but it's not the fault of taxes in themselves. Maybe you should stop voting for idiots and corrupt politicians, and do something to ensure that your taxes are used equitably.

But if you disagree with the whole premise, then that just means you're as greedy and selfish as they are.

Re:Taxes

[AK Marc]

https://en.wikipedia.org/wiki/...

Use taxes don't depend on the service purchased being local. Note, Texas law prevents Tesla from selling a California Tesla in Texas across state lines, as well as "use taxes" being supported in court many times.

*BOOM* headshot..

Re:Taxes

[fustakrakich]

If you can afford to fight... I wish people would demand that the city do the extra paperwork at least, but it must be minor issue in the minds of Chicago voters. Personally I think 9% is outrageous. It had better come with a set of Monster network cables

Re:Taxes

[AK Marc]

Personally I think 9% is outrageous. It had better come with a set of Monster network cables

http://taxfoundation.org/blog/...

9% is high, but not the highest. There are places with higher, and I'm not sure in that graphic whether they count hotel taxes and other such surcharges as "sales tax" and that's more like this one is aiming, as an "entertainment tax".

Re:Taxes

[udachny]

I owe you absolutely nothing and unless I am buying something from you or you are buying something from me I have no interest in you. If you want want government to stealcfrom me to subsidise you somehow and then call me a 'sociopath' or a 'moron' for not accepting that, then you are not only a thief, but some kind of a sick psycho thief.

Re:Taxes

[KGIII]

Chances are pretty good that you do indeed owe me. You probably owe me quite a bit. This is, of course, assuming you pay the average amount of taxes compared to the services you use. If you pay more than average you probably still owe me when it is compared to the services you take advantage of. I pay more in taxes than I get out of the system. I got this way from the taxes other people put into the system (literally) and am grateful for it. I do not pay enough in taxes, really. Instead I donate to causes I believe in and give the government exactly what they are due.

Re: Taxes

[ravenshrike]

Excpet greed is demonstrably good so long as one plays the rational actor in basic game theory. It is only when one plays the consistent bad actor that the impulse of 'greed' becomes a bad thing.

Re:Taxes

[duke_cheetah2003]

This is a Use Tax, which has been ruled legal 100 times before (perhaps hyperbole, perhaps not).

I just had to snicker when you said it was a "Use Tax", a very difficult to collect and enforce kind of tax. I lived in a state with Use Tax once.. never paid it either. Use Taxes are silly, they actually say something like if you buy a tank of gas in another state, you have to pay Use Tax on the gas you have remaining when you re-enter the state with the Use Tax. Insanity tax. Good luck with that, Chicago.

Re:Taxes

[AK Marc]

My point was that so many people were getting hung up on "use taxes are silly" without even realize they were talking about use taxes. The tax should be valid, it's valid everywhere. It should be ignored. I was born and raised in a state with use taxes. I didn't learn what a use tax was until after I had left. Neither I, nor my parents, ever paid a use tax, despite having owed one, many times.

Chicago's move is rational. It placed a use tax on entertainment, then argued that streaming entertainment is entertainment, not a "purchase" (which would fall under a different use tax). They are 100% correct, and the move is 100% legal and consistent with existing law and rulings. It's just that Use Taxes in general are silly and ignored. They only work when the state claims a nexus and converts it to a sales tax.

Re: Taxes

[electrosoccertux]

It's only one degree hotter. The frog will be fine

time to reference the Beatles Taxman

[turkeydance]

As their earnings placed them in the top tax bracket in the United Kingdom, the Beatles were liable to a 95% supertax introduced by Harold Wilson's Labour government (hence the lyrics "There's one for you, nineteen for me").

There is another possibility too..

[140Mandak262Jamuna]

International law firm ReedSmith weighs in on this point as well: '[O]nce the Department begins to audit and assess customers located within the city, many of those customers are likely to demand that providers collect the tax going forward. As a result, many providers will likely feel the need to register to collect the taxes, despite lacking nexus, and despite having strong arguments against the Department’s expansive interpretation of its taxing ordinances.'"

When the government starts auditing people and dunning for money, their first reaction is going to be, "how do I throw these clowns out of office?", they are not going to make a hue and cry and demand their service providers to collect taxes. These providers are also savvy, they will spend a little on lobbying, fund a few challengers and some incumbents ...

Knowing Chicago it looks more like another shakedown to get some campaign cash than to collect a new tax.

Re:There is another possibility too..

[HiThereImBob]

As a resident of Chicago, I personally think these taxes are not really that big a deal. $10 a yeast for netflix...meh.

and that attitude is exactly why you are stuck paying them.

Re:There is another possibility too..

[John_Sauter]

International law firm ReedSmith weighs in on this point as well: '[O]nce the Department begins to audit and assess customers located within the city, many of those customers are likely to demand that providers collect the tax going forward. As a result, many providers will likely feel the need to register to collect the taxes, despite lacking nexus, and despite having strong arguments against the Department’s expansive interpretation of its taxing ordinances.'"

International law firm ReedSmith does not appear to have had experience with New Hampshire. When Massachusetts leans on providers who operate in both states to collect Massachusetts sales tax when a Massachusetts resident buys something in New Hampshire, the New Hampshire legislature leans back, making such reporting by the New Hampshire branches illegal.

Some years ago Massachusetts stationed an observer near the parking lot of a New Hampshire liquor store. He would write down the Massachusetts license plates of cars in the lot and relay them to a state trooper just across the state border. When the cars reported would cross the border they would be stopped on a pretext, and fined for having untaxed liquor in the car. New Hampshire stopped this practice by busting the parking lot observer for running a numbers racket.

I predict this case will be similar. The providers will resist collecting the Chicago tax, and if Chicago leans on them, other jurisdictions will lean back.

Re:Databases?

[MightyMartian]

Are you saying they should tax database, records, fields, or heck, maybe they could tax SQL clauses!

Another Reason...not to live in Chicago

[Ritz_Just_Ritz]

In case the crime and murder rate wasn't enough.

Re:Another Reason...not to live in Chicago

[Suffering Bastard]

Another Reason...not to live in Chicago

I live in Chicago. East Rogers Park, at the most northeast end of the city. I live on a Lake Michigan beach and have gorgeous views of water (east) and coastline (south). The building I live in has charm, character and a generous community. I pay a modest rent for a spacious one bedroom place. Best of all, it's quiet.

On a hot July day like today, I look out my window and see beach goers, kayaks, sailboats, catamarans, and the like. It's like living on a resort.

During the winters, the snow and ice over the lake is breathtaking, and the sun rises are magnificent.

I've lived in parts of the city I wouldn't ever want to visit again. But there are areas of Chicago that are real gems. It's not all greedy politicians (fuck Rahm) and pollution and crime.

The parking meter disaster was Daley's fuckup. Now Rahm has contributed to the blood-squeeze of the citizenry. Chicago's not a perfect place and I would have been long gone had I not found the place where I live now. But Chicago still has some of the best music, food, and ethnic diversity you'll find anywhere. Don't go by the headlines to find out what Chicago has to offer. Dig a little deeper.

In the famous words of Nelson, "Ha Ha"

[Anonymous Coward]

Chicago has chased all of the businesses out since the early 1990s with tax increases. Google "Chicago head tax", it's a real thing. Chicago thinks businesses want to do business in a place that's freezing in the winter, with inadequate transportation routes, and increasing city-related costs/tax. Chicago is a drain on the entire state which is also $65bn in debt.

Good luck Chicago!

Last Out Queue

[pubwvj]

Will the last person to leave Chicago please turn off the lights?

Re:Last Out Queue

[Anonymous Coward]

Chicago, the next Detroit. Funny how the Democrats continue to run cities into the ground.

Re:Last Out Queue

[VABEast]

Reminds me of Miami in the early '80's. Will the last American please grab the flag!

Re:Last Out Queue

[WrongWay]

I left the city 15 years ago thank god... but im still stuck in Illinois.. which is a whole nother shit storm.

Re:Last Out Queue

[fahrbot-bot]

Chicago, the next Detroit. Funny how the Democrats continue to run cities into the ground.

But leave it to the Republicans to run the entire Country into the ground.

Re:Last Out Queue

[Slim_Jack]

That is more or less what happened in Detroit. In Detroit, everyone who lived bread and butter on welfare just maintained a post office box, and the mayor had an army of bureaucrats collecting good benefits. When the middle class fled, there was no local tax base and the whole thing collapsed like a house of cards. Only recently the governor of Michigan restructured their debt and appointed a manager to sort the whole mess out,but for a while there you could get houses for $1.

Re:Last Out Queue

[JBMcB]

True story: A couple decades ago the City of Detroit bought a couple parcels of land downtown to build a parking garage. They never combined the parcels with the county, though, so one looked like it was still owned by a private entity. A few years ago the county got their act together and started foreclosing on landowners delinquent in their property taxes. The city of Detroit ignored the mail about the property taxes being due. The county put one of the parcels of land for the parking garage up for sale, and a sharp-eyed investor bought it. The investor is now asking for half the revenue of the parking garage, as he owns half of the land that it sits on.

The city is, of course, taking the investor to court, but they don't have much of a leg to stand on, considering:
1. They screwed up the registration of the property in the first place
2. They ignored the tax notices
3. They ignored the foreclosure paperwork
4. They ignored the notice of sale for the auction

Cdn servers are a physical nexus

[known_coward_69]

Netflix has their cdn boxes everywhere. That's a physical presence

Re:Cdn servers are a physical nexus

[hawguy]

Netflix has their cdn boxes everywhere. That's a physical presence

They transfer ownership to the ISP, so they are not owned by Netflix:

https://openconnect.netflix.co...

OCA ownership is transferred to an ISP at no charge and OCAs are fully supported by the Netflix Open Connect Engineering and Operations teams. For ISPs interested in localizing their traffic and working more closely with Netflix, we have delivery options for all sizes of ISPs, guidelines for peering and interconnection, and a collection of frequently asked questions.

Re:Cdn servers are a physical nexus

[pepty]

1."OCA ownership is transferred to an ISP" Transferred before or after installation? Laws in IL and IN are set up so that once you have a physical presence you don't have to keep it to be subject to sales/use taxes. My company is likely to start having to charge sales tax in IL because we will have a booth in a conference in Chicago for a few days, even though we won't actually sell anything there. Ditto for Indiana once we show up to install equipment.

2. If a chain of stores transferred ownership of stores to the malls they're in on the proviso that the stores are still to be used primarily to distribute the chain's products, I don't think that would exempt them.

Re:How would aereo tv service work into this?

[TheGavster]

Taxation of Illegal Income in the United States

At least in the US, tax collection agencies have never balked at collecting their share of your ill-gotten gains. In fact, it's a worse tax situation than legitimate business, because there are classes of expense, such as bribes, which cannot be deducted.

Wasn't it marginal?

[rsilvergun]

I suppose I could see them complaining if it was a flat 95%, but afaik the UK does Marginal taxes the same as the US, meaning they paid the same taxes as a lorry driver up to certain point.

Oh get over it.

[rsilvergun]

It's a 9% tax on entertainment. It's not the bloody Spanish Inquisition or the Gestapo. It's become damn near impossible to raise taxes enough to run a city anymore. The Right Wing have a name for it, Starve the Beast. Thing is a big dog is a beast, and that Beast was the only thing keeping the Robber Barons at bay. Doesn't anyone remember what laissez faire meant for 99% of the population in 1900s?

Re: Oh get over it.

[Anonymous Coward]

I agree. When you have a bunch of overpaid beauracrats running these cities there will always be issues. Not to mention the corruption. Welcome to Detroit errr... Chicago.

Re:Oh get over it.

[Dutch Gun]

And all those little taxes, from city, state, and country, all add up to between 40% and 60% of most US citizens' income. How much is enough? No one (well, maybe some nutjobs) wants to go back to laissez-faire, but I think it's not unreasonable to look at the amounts of graft and waste that occurs and demand better accountability before simply bending over for each new tax like a good, compliant citizen.

I have to wonder if the Chicago politicians even know what the hell they're really taxing when they attempted to tax all "cloud computing and streaming". It feels a lot more like a desperation move that they're hoping no one calls them on. Adding new taxes like this also increases the regulatory burden for its citizens and the city itself, which indirectly reduces the taxes effectiveness by increasing the overhead of compliance. It would be far better to simply adjust the property tax rate to match the expected revenue increase. Of course, that's a lot more visible, and the taxes there are already apparently pretty terrible, which is why they probably balked at that idea.

So, "get over it?" I wonder how many people will "get over it" by getting the hell out of Chicago - or at least the city itself? Having visited the area recently, I can assure you that there are lots of very expansive and attractive outlying towns and suburbs suitable for both homes and businesses.

Re:Oh get over it.

[Impy the Impiuos Imp]

One needs to "starve the beast" the beast being our own tendencies to vote to lavish on ourselves, with disproportionately wasteful government super-markup.

It is voracious, and always spends as much as it can get, and is always chronically short, needing to borrow. Actually, most borrowing is viewed as income to spend -- they can get away with borrowing X percent of GDP. It has nothing to do with need and everything to do with more money to spend.

Starve that beast. Shut off new inventions of income.

Re:Oh get over it.

[Anonymous Coward]

The more the population increases, the more efficient government should become. Taxes should actually go down as there are more people paying a piece of the price for infrastructure. The problem is, once a government program gets established, it's near impossible to get rid of, even after it has accomplished what it was intended to. Then there is a new need, a new program, and more money needed. The bureaucracy just keeps growing and growing without ever cutting back. most conservatives are not against government and taxes to support essential services. We're against fat and obsolete agencies that keep taking and not adding value. Cut back to what is essential. Review and cut expenditures when no longer needed. If program is started with a goal to cut X by 40% in Y years, don't keep trying to cut by that same 40% well after the goal was achieved. Be agile and responsible with spending.

Re:Oh get over it.

[Anonymous Coward]

The Right Wing

Right Wingers run Chicago? Detroit? Baltimore? Stockton? Flint? Cleveland? Camden? Oakland?

WTF are you smoking?

Every one of these hellholes has been under near exclusive control of left wing hate mongers and race baiters since the late '60s. How in the hell is anything that goes on there — particularly municipal tax policy — related to the Right?

Doesn't anyone remember ...?

No. They don't. People are so far removed from actual suffering and deprivation that they can't fathom what actual pain is like. Today the common denizen of your liberal meccas are morbidly obese; they have never known a day of hunger in their lives. Work is purely optional as the safety hammock insures as much sit'n on the couch time as desired.

Re:Oh get over it.

[Solandri]

And all those little taxes, from city, state, and country, all add up to between 40% and 60% of most US citizens' income. How much is enough?

Actually it's about 33% (dipped below 30% during the recession, but has moved back up). But I agree with you. People need to understand that only the sum total of all taxes matter. Even corporate taxes are eventually paid for by individuals - via higher prices for goods and services, or lower wages for employees. In that respect, taxes could be vastly simplified if they were collected from a single point in our economy. If you want a graduated tax (richer people pay more), then the logical choice is the income tax. Nearly all other taxes could be eliminated and rolled into just income taxes. (Exceptions would be excise and regulatory taxes which fund directly-related government services, and property taxes which discourage "sitting" on property waiting for it to appreciate instead of developing it immediately to maximize public utilization.)

In this particular case, the Constitutional prohibition on interstate taxation would've applied. Except the states have been busy whittling away at that and Congress seems unwilling to challenge this usurpation of a power clearly reserved to them. I don't mind if you think the Commerce Clause is wrong, but express your disagreement the way the architects of our country intended - modify the Constitution. Don't try to justify it with painfully convoluted arguments for why the clause doesn't mean what it clearly says it means, just because you can't muster enough votes to amend the Constitution.

Adding new taxes like this also increases the regulatory burden for its citizens and the city itself, which indirectly reduces the taxes effectiveness by increasing the overhead of compliance

I've done business in Chicago. The purpose isn't compliance. The purpose is graft - money paid to government officials and politicians under the table if you "need more time" to come into compliance. I expect certain ISPs and data centers will come to "arrangements" with Chicago where their customers won't have to pay this tax.

Re:Oh get over it.

[KGIII]

So you want to deflate your dollar's value and then have no money in, maybe, a month (like a 2 dollar whore in a crack house) later be broke and then trying to figure out who the new 1% is (which is surely somebody though they have no wealth now, the dollar has no value) and steal it from them again and then... Well, what then? You are driving the bus. You tell me what comes next.

Re:Oh get over it.

[Anonymous Coward]

33% if your smoking crack... 25% fed rate... 15% SSi / Medicare.. and yes you have to count both employee and employer halves.. 9% state income tax in Oregon.. that's 49% right there.. plus 1% business tax in Portland.. and all the other misc bullshit taxes and I'm well close to 60%.. and I can't even afford a median priced home here... they rich guys can go fuck themselves

Re:Oh get over it.

[Noxal]

How intellectually dishonest for you to omit that there are no sales taxes in Oregon.

Re:Oh get over it.

[Dutch Gun]

That's a ridiculous assertion. Most of us understand quite well that states get their taxes in a variety of ways.

Oregon's northern neighbor Washington State, for instance, collects sales tax but has no income tax, whereas California has both an income AND a sales tax. Nearly all states also impose property taxes, and of course they tax businesses. Ultimately, everything gets paid for by individual consumers, either directly (as with sales, income, or property taxes), or indirectly though increased prices of goods and services (as with business taxes and fees).

Ultimately, you can boil it down to an estimated percentage of individual income. According to Forbes, state tax ranking is as follows for someone earning $50K:

* New York ranks at #50 at 12.6%
* California is #47 at 10.4%
* Illinois is #38 at 10.2%
* Oregon is #35 at 10.10%
* Washington is #24 at 9.4%
* Wyoming is #1 at 6.9%

Yeah, but I still don't see the problem

[rsilvergun]

you're still living very, very well. Also, these high level marginal tax rates are about the only thing that I've ever seen that solves the problems with income inequality. Specifically how a civilization leans towards oligarchy and stagnation as a smaller and smaller group of people claim all the money for themselves. Wealth builds on wealth, and at least here in America we don't see any end to that. The pie might get bigger, but if my slice gets tinnier ever year it hardly matters...

Put another way, I saw an interview with a multi millionaire complaining she didn't have any political voice anymore because the billionaires money crowded her out...

Re: Yeah, but I still don't see the problem

[Anonymous Coward]

It's the tax man's way of saying "you've done your part, now how bout you let someone else have a go?"

Seriously, I think we would all be better off of people stopped taking capital out of the economy after they made their first million and let someone else make that next million.

Re: Yeah, but I still don't see the problem

[Mark Shewmaker]

Please explain this concept of millionaires taking capital out of the economy; specifically, how does their further wealth growth affect me negatively? (On average, in the more general case, and not the outlier case, and please assume they're not buying laws, paying hit men, engaging in crony capitalism, etc.) I ask because I'm perfectly happy for their wealth to continue to grow.

Re: Yeah, but I still don't see the problem

[Anonymous Coward]

I think we would all be better off of people stopped taking capital out of the economy after they made their first million and let someone else make that next million.

But how are they going to make a million if no one is investing their money because they won't keep any of it anyway? They don't take capital out of the economy -- they put it back in. Thus the complaint that benefits for investment only benefit the rich.

You can't just show up and say that you want to make a million dollars. To get a million dollars in income, you need there to be millions of dollars in investments. If you don't have those millions yet, then you need there to be a large income source to support your income. As a practical matter, you need at least ten times the income to justify your salary. And you need another ten times that in capital investment to generate that income.

As a model, this might work for entertainers. But do you want it to do so? What would happen if the Who, AC/DC, Rush, or the Rolling Stones could no longer make money by releasing an album? Would they ever go on tour again? Are you satisfied with the their cover bands being the only live performances left? For that matter, think of AC/DC without the Back in Black album, Rush without Moving Pictures, or the Who without Tommy and Quadrophenia. They'd have already made their million by then.

What if pro sports careers were typically one to three years long? So high salaries meant mainly that a player would have a shorter career. In the NFL, the minimum salary used to be $400,000. Utility players wouldn't even be able to play out their entire third season. We already know what that would look like, as it pretty much matches college careers.

And would the world be better if companies went back to paying their top executives with perks rather than salary? When people have a choice between access to a private plane or ten million dollars, they'll almost always take the money. When they can't take the money, companies will have to compete in other ways.

What about the return of charity vacations? In a charity vacation, a moderately famous person has their employer give a charity money. The charity then finances a trip to wherever. They shoot some promotion videos of the moderately famous person and pick up all expenses (food, housing, transport, assistants, etc.). The company gets the tax break. The moderately famous person gets a free luxury vacation. The charity gets promoted. But no investment from that. It's straight consumption.

If you want everyone to get their chance at making a million dollars, then you need everyone to step up and make the sacrifices to make a million dollars. Prohibiting person A from making money does not automatically shift the money to person B. Person B has to step forward and do the work.

Re: Yeah, but I still don't see the problem

[FlyHelicopters]

I wish I could give you a million mod points...

Finally someone who gets it. Way too many people think that if we take money from rich people, poor people suddenly won't be poor.

That just isn't true.

This doesn't mean rich people shouldn't pay taxes, of course they should. But there is a limit to how much you can take before it becomes a problem.

Re:Yeah, but I still don't see the problem

[ax_42]

you're still living very, very well. Also, these high level marginal tax rates are about the only thing that I've ever seen that solves the problems with income inequality.

Income inequality is only a part of the problem -- it's wealth inequality which becomes the real issue. This is why estate taxes are a good idea, they prevent the pooling of massive amounts of wealth over generations. Many of the super-rich never had an income, it all come from the folks.

Re:Yeah, but I still don't see the problem

[Charcharodon]

You know that whole pooling of massive amounts of wealth over generations would apply to you too if the government didn't step in and take half of it while you make it and then another half after you die.

At 8% interest and $25 a month from the month you are born till you are age 72 you would be a multi-millionaire.

What the fuck?!!

[codepigeon]

This is way off topic, but what the fuck is happening to slashdot. I just now noticed something blaring from my headphones on the floor. Apparently it was some kind of audio ad and for the life of me I didn't know which part of the webpage was playing it.!??!

Then I happen to notice that the 'busy circle' at the top of the chrome tab has been spinning for at least 5minutes. Are you fucking kidding me?

Here are two of them that I noticed. God only knows how many others were busy doing god knows what. (liverail.com and advertising.com) (I wont post actual links)

I can't stand the "slashdot is dying" meme, but I think I am close to moving on to another news aggregate. -Slashdot reader since ~2000AD

Re:What the fuck?!!

[mpoulton]

If you're logged in and have good karma, you should be able to disable ads as a "courtesy" to dedicated contributors. Or just use an adblock extension.

Re:What the fuck?!!

[Lando]

Disable ads as a courtesy doesn't work for long. It's a short window until the ads come back. I finally pulled out the adblock tools. Slashdot overstepped the amount of advertising I was willing to put up with. I was one of the first 100 here, this is my third account since I forgot the login for the others. Only people that probably put up with this crap are the new people that don't know better. I certainly don't recommend slashdot to people anymore.

congrats

[argStyopa]

...you folks wanted government to provide everything under the sun.

Now they're going to take everything you have to pay for it.

Oh, and BTW Chicago has been losing population for years. I wonder why?
http://www.chicagotribune.com/...

Cable?

[CanadianMacFan]

I was wondering if cable subscriptions would be impacted by this (or were they already hit by the sales tax?). The article states "expanded its amusement tax to include amusements such as TV shows, movies, videos, music and online games, if they are delivered by electronic means to customers in the city". Since most cable subscriptions are digital now it would seem that they should be included in this. It would be weird (though not unexpected for a law to have unforeseen consequences) to have something like HBO not taxed when part of a cable subscription but taxed when streamed through the Internet even when it's basically the same thing.

Re:Databases?

[l0n3s0m3phr34k]

IF tax > 0 DROP TABLE "politician"

Nine percent?

[jcr]

This also applies to Chicago businesses that pay to use databases online.

This would be enough to cause the Chicago Mercantile Exchange to relocate to another state. I'm sure that Indiana, Wisconsin, or Michigan would welcome them with open arms.

-jcr

Re:Nine percent?

[DigiShaman]

Or Dallas, TX perhaps.

Re:Nine percent?

[jcr]

You're right, that is the most likely scenario. I'm sure they'd buy Rahm off with a couple of grand in "campaign contributions" and he'd leave them alone.

-jcr

I think Warren Buffet was asked this

[rsilvergun]

and he basically said it wouldn't stop him from making more money. We're talking 5% of _billions_ here after all.

Basically, you can only spend so much

[rsilvergun]

it has to do with how a dollar circulates. I'm in pretty bad shape financially. I had 3 close family members get hit with major illnesses all at once. I'm still recovering and I'm not sure I ever will. What I'm saying is I spend just about ever dollar I get my hands on paying debt and buying food/shelter/transportation. There's a little discretionary funds in there for my kid. I try to let her do thing things her friends (who's parents didn't get economically cock punched non stop for 10 years) do.

Now take a Donald Trump. No matter how greedy he is there's only just so much he can buy. At some point his money is just sitting around, doing nothing. He'll invest some of it, lose some of it, etc. But He's only got so much time in the day to do that. Eventually it becomes a war chest laying around doing nothing.

When we take it even further, to the level the Waltons have achieved what we have is pretty much the dark ages. You've got a small group of folks with _all_ the wealth. They're more or less Gods (Divine Right of Kings, anyone?). They stop investing because, heh, why should they? They already have the best civilization has to offer. As a result things can really only get worse for them.

If the above sounds complicated it's because it is. That's what makes cutting the marginal tax rate so seductive. It sound like an easy answer to the world's problems. Supply side economics, right? But there really is a reason we called them Voodoo Economics...

Re:Basically, you can only spend so much

[FlyHelicopters]

I'm in pretty bad shape financially. I had 3 close family members get hit with major illnesses all at once. I'm still recovering and I'm not sure I ever will.

I'm sorry to hear that, but that is what bankruptcy is for. A fresh start. If you're that far in the hole, it may be time to hit "reset" and start over.

Zero is a better number to start from than negative $100,000, just as an example.

Now take a Donald Trump. No matter how greedy he is there's only just so much he can buy. At some point his money is just sitting around, doing nothing. He'll invest some of it, lose some of it, etc. But He's only got so much time in the day to do that. Eventually it becomes a war chest laying around doing nothing.

Except, that isn't how it works. That money is doing something, somewhere, all the time. No, he doesn't have it in a shoe box.

It is also not sitting idle in a bank account, but even that has benefits to the balance sheets of a bank. It is in investment companies being invested into new companies that will create jobs.

If you have a job, it is likely due to those millions creating it. If it wasn't, then you could go create jobs yourself, but you can't because you're poor.

If the above sounds complicated it's because it is. That's what makes cutting the marginal tax rate so seductive. It sound like an easy answer to the world's problems. Supply side economics, right? But there really is a reason we called them Voodoo Economics...

It isn't complex at all.

The thing is, most people don't have a major problem with a millionaire paying 30% taxes while a poor person pays 10% taxes. The real issue is that some people want poor people to pay no taxes (that is a horrible idea, everyone should have some investment into the system) and rich people to pay 90% taxes (that is a horrible idea, people will go to any lengths to avoid such taxes).

The real question is: "How high can you raise marginal tax rates before people either stop bothering to earn more (thus not creating any more jobs), or before they take whatever measures are required to avoid paying them (see Apple and company with fancy accounting).

Re:Basically, you can only spend so much

[Rockoon]

At some point his money is just sitting around, doing nothing.

You are a special kind of ignorant twat. Rich people that let their money just sit around doing nothing are soon to be not rich, which is problem solved from the perspectives of your very weak argument, yet somehow you see the problem being solved as supporting your argument that the problem needs to be solved.

Re:Basically, you can only spend so much

[KGIII]

You know they do not leave it just sitting around the house, stuffed into walls, and in their mattresses, right? It *is* invested. It is in banks, stocks, bonds, CODs, mutual funds, and (my favorite) municipal bonds. Also it is in a lot of other places doing good things. I am not a skilled investor but I actually do okay just poking around and following the online news sites carefully. I also like to take the news and mash up the words and see what trickles out but I am insane and this is not the best strategy though I suspect it can work.

Re: Basically, you can only spend so much

[KGIII]

Investments are the money doing work. You do not invest in a company so that the company can just sit on the money. They take that money and spend it doing things like growing their business, hiring new people, buying supplies, investing in growth, creating new products, and other things. When you put money in a bank it does not just sit idle in a bank. That money is also invested, it is used to loan other people money, it pays salaries and works. Unless you are storing it in a shoe box, or a proverbial shoe box, it is working. Obviously you should have some in a shoe box so that you have access to it.

So, after you take someone else's money what are you going to do when that money is gone? If you stole all the money from the 1% you could run the federal government on that money alone for a grand total of a little over four days (using someone else's math but checking it indicated that it was the correct sum) and then they will have the same situation they were in before (and fewer investments in short or long-term growth) and, worse, because of all the money being exchanged and the wealth removed the deflated dollar will have even less buying power than it had before that.

YTMND! So, what is next? You have no more wealthy people but you do have a bunch of new people who collected those lowered-value dollars. Are you going to take it from them next? How many times are you going to do this? Are you going to drive the country into the ground as quickly as you can or are you going to make it slow and painful?

Re:Basically, you can only spend so much

[Areyoukiddingme]

Now take a Donald Trump. No matter how greedy he is there's only just so much he can buy. At some point his money is just sitting around, doing nothing. He'll invest some of it, lose some of it, etc. But He's only got so much time in the day to do that. Eventually it becomes a war chest laying around doing nothing.

Except, that isn't how it works. That money is doing something, somewhere, all the time. No, he doesn't have it in a shoe box.

It is also not sitting idle in a bank account, but even that has benefits to the balance sheets of a bank. It is in investment companies being invested into new companies that will create jobs.

No it's not. It's really not.

Trump is probably a bad example because he goes bankrupt all the time, but pick any other hundred-millionaire or billionaire and look at where their money is. It is NOT in new companies. It is in old companies. It's in the stock market, chasing fewer and fewer stocks, driving their valuations to stratospheric levels completely divorced from the P/E ratio of the companies involved. It's creating bubbles in stocks, in commodities, in real estate, jumping from "sure thing" to "sure thing" with manic desperation. It most definitely is not creating new companies and new jobs. Look at the statistics for both job creation and small business creation. Both are effectively nonexistent.

Why? Let's examine the reasons.

The four Walton siblings collect approximately $3 billion dollars per year in Walmart dividends, every year. That's cash money that has to go somewhere, and even the most lavish of all possible lifestyles can't suck it up, so of course some large fraction of that cash gets reinvested. According to Forbes, the four of them together control $144 billion. Much of that is Walmart stock, but the rest is wherever those dividends have been reinvested.

Let's try to put that number into perspective. They could, in theory, get together and buy outright any but the largest 36 publicly traded companies in the world. That includes names like Honeywell, ConocoPhillips, Goldman Sachs, Caterpillar, Walgreen, and Monsanto, to name but a few. Any two of them could buy General Motors and have at least $16 billion left over. Any one of them could buy Tesla Motors and have at least $9 billion left over.

Except, of course, they can't. It's not possible. Even if Alice Walton decided tomorrow that she really wanted to get out of consumer retail and into car manufacturing, she can't buy Tesla Motors. The NASDAQ couldn't take the shock. She'd have to liquidate some large fraction of her Walmart holdings, which would cause Walmart's share price to go through wild fluctuations as other billionaires tried to figure out what she's doing and whether or not she knows something they don't know about Walmart's health as a business. The NASDAQ circuit breaker would kick in, WMT would stop trading, and her brothers and sister would be on the phone yelling, "What the hell are you doing?!"

That's at the top end of what's conceivable, but not possible. Now let's consider the bottom end. Say, instead of a big splash, Alice Walton decides to use her ~$700 million in 2014 Walmart dividends, basically pocket money for her, to start a new business. Again, for the sake of comparison, let's consider a subject near and dear to Slashdot's heart, SpaceX. Elon Musk invested $100 million into SpaceX by the 4th year of its operations, according to the New York Times, quoting his own public statements. Alice Walton could, using one year of cash earnings from Walmart, invest seven times what Elon Musk invested into SpaceX in four years into her own new rocket company.

So where is it? Where's the new rocket company? SpaceX has done its capitalistic best to demonstrate that it's downright easy to compete with the United Launch Alliance, signing 46 launch contracts in a handful of years, demonstrating vast untapped demand, demand that pundits claimed didn't even exis

Re:Basically, you can only spend so much

[FlyHelicopters]

We had a real problem in Sweden that physicians (M.D.'s) only worked 6 months a year because that was enough to sustain them for the other 6 months and the government would take 75% of what they earned the other 6 years. So we had a shortage of doctors.

We had that problem back in the 50's when the US tried a super high tax rate.

Ronald Reagan talked about it, actors back then would work for 3 months and then take the rest of the year off, because most of what they earned after that was taken by the government, making it pointless to earn more.

A 75% tax rate is just criminal, the idea that the state is entitled to 75% of whatever you produce beyond a given point is evil.

Re:Basically, you can only spend so much

[FlyHelicopters]

No it's not. It's really not.

Yes, it really is... your saying it isn't doesn't make it so. But I won't bother addressing the rest of your post because you weren't listening the last time and won't this time.

So carry on...

Re:Basically, you can only spend so much

[pnutjam]

Not true, a major problem with the current economy is the low interest rates. There are huge pools of money looking to be invested, and only so many places to invest them. That's what's running up stock prices and moving us back into bubble territory.

Re:Basically, you can only spend so much

[pnutjam]

Well said, and low interest rates are causing more and more risk aversion for large funds. Larger funds are also preferred by bankers, because it's easier to skip afew percent.

Re: Basically, you can only spend so much

[electrosoccertux]

Good post thanks

Re: Basically, you can only spend so much

[phocion]

A few thoughts on what you've said. First, it sounds like you're going through very rough times financially. I've been there myself and know how tough it is. It sucks, knowing your bank accounts are empty, you've just eaten the last piece of the generic bologna and now the fridge is empty too, creditors will start calling soon, payday is a week away, and even when the paycheck does come almost all of it will immediately go to keep from falling even further behind on the bills. It gets better. Hang in there. As for Donald Trump, he (or rather his company) is close to declaring bankruptcy for the fourth time, and while he may personally have millions, he's wasting tons of it running for the nomination in a party where well over half of the members have said that they would never under any circumstances vote for him. Brilliant. He may have inherited his fortune from his father the slumlord, but his kids better be investing well now if they want to stay rich. As for the Waltons, you're correct to say they have an almost inconceivable amount of money. But a generation ago that fortune was all Sam Walton's. Now it's split among all his kids. In another generation it'll be split again among all his grandkids. If all his kids (and their kids, and so on) have at least two children, the growth is exponential. Sure all the Walton great-great-great-grandchildren will be rich a hundred years from now, but they won't be anywhere close to Sam Walton rich unless their investments are getting unheard of returns. And you're right, they all aren't investing, at least not in a way that will bring them more money. One of the Waltons has used their fortune to build an art museum down in Arkansas that is considered among the best in the world. That's the kind of thing that can only happen when the system allows wealth to concentrate like it does. As for Walmart, I know I could (and still do) buy a lot more food there with a limited budget, and I was glad for it. The Walton's may have gotten wealthy doing it, but it helped me too. Supply side economics is flawed, but not completely. The basics of economic math can't be ignored. You have to have people creating wealth for an economy to grow. It's impossible to tax and spend your way to prosperity. Ignore the math and you end up like Greece.

Curious

[nehumanuscrede]

As Netflix is delivering content remotely to an end user, what exactly is the difference between it and say Satellite, Cable or even broadcast TV other than the medium utilized to deliver the data bits ?

We going to apply this " information tax " to everything else in the long run too ?

Pro Tip for the nobles: Entertainment ( you know. . . the whole bread and circuses thing ) is the only thing preventing the masses from burning down the entire Kingdom. You might want to reconsider throwing a wrench into that program. Assuming you like staying in that elected position and all . . .

What legal brilliance in Chicago thought this scheme up ?

When does it end?

[Sanctuary]

The Internet service itself from the ISP is already taxed and other surplus fees. Wouldn't this be a double tax to use something you already paid tax on? This is a dangerous slop I would think. What is next changing an extra tax because you want to use the electricity to charge your car? Oh you want to use that water to bake bread with, yea there is a tax for that too...

New Chicago

[rossdee]

New Chicago? That was a planet featured at the beginning of "The Mote in God's Eye" (Niven/Pournelle)

Re:New Chicago

[Agripa]

The rebels renamed it Dame Liberty.

Chicago...

[stolidobserver]

Did anyone take anything seriously after they saw that name? I didn't. Those people get what they are too lazy to divert. I've been there, rode in on a train, hired a bum to get us to the liquor store (not joking, dude took my whole party to a big underground liquor store, after which we went to the House of Blues)

they're handling this incorrectly

[slashmydots]

The proper way to handle such ridiculous legal nonsense is to simply ignore it. Refuse to collect anything and pretend the law wasn't passed. Then make Chicago do all the legal work to form a case proving they actually need to comply with the law. That's cheaper, easier, and more likely to work than immediately lawyering up and fighting it.

I remember my first years on Usenet

[Trax3001BBS]

Every February it started again anew, there's going to be a tax on the Internet, it became a ritual posting and thread. Now it seems to of taken place, it only takes one to spread.

Re: Cut da Chicagoians a break!

[Anonymous Coward]

And when are you going to realize that taxing corporations only leads to increased prices to consumers?

There should be no tax breaks for anyone at all. A simple flat or progressive tax with no deductions/loopholes is the best. You make X dollars, you pay Y tax.

What most will do

[Nyghtfall]

Living in Chicago now? Start sharing netflix id's across the board - hurt's netflix's revenue (laughingly, on slightly) and the city at the same time. Can you imagine the look on their face when they see 1 netflix account for Chicago? I know, I know - limited devices active on a single account - would still be hilarious though. Otherwise, you can always go back to bit torrent.

Re:Democracy

[Noxal]

You're an idiot.

You can't really do bankruptcy anymore

[rsilvergun]

Not in America anyway. The laws changed and you can no longer discharge debt less than 100k. It's not the clean slate it used to be.

That's really the biggest trouble in America today. Everyone believes there's this safety net, but it's gone. Clinton gutted it in the 90s during the .com boom while the economy was doing so well nobody noticed...

Re:You can't really do bankruptcy anymore

[FlyHelicopters]

The laws changed and you can no longer discharge debt less than 100k.

Just for the record, this isn't true.

There is a means test, which is put into place to try and keep people from discharging debts they could otherwise pay.

My brother went through this 2 years ago after his divorce and he had to do a chapter 13 because he failed the means test, he makes enough that he can pay something towards his debts.

If you're well and truly broke without an income, then chapter 7 discharge is still an option.

Re: You can't really do bankruptcy anymore

[electrosoccertux]

Bush also removed capacity for default on student loans in 2005.

They are not your friends.

Re:No more local taxes

[packrat0x]

Getting a little tired of this. As cities grow, yes more money is needed. I understand this. But as cities and states grow, there are more taxpayers increasing overall income from sales tax, property tax, gas tax and wtf ever tax. I'm expected now to get an AMA liscence(understandable with insurance and such), and then get a permit from the city to fly anything rc controlled. Bunch of crap.

Ahh, but Chicago ISN'T growing. (Borrowed this from another poster).
This tax is an indication of a Death Spiral.

The real issue here...

[bbands]

is the gradual and accelerating erosion of Internet freedom. On a recent trip to China I got a hint of what the future will be like. We all know that Google and many other sites are banned in China, but we understand the knock-on effects? Many sites, including our own, use Google services of one sort or another, a choice that renders them broken in China. A banning here, a closed reddit there, a tax in the windy city; slowly the noose tightens on the glory that was our network.

How Will They Know?

[sudon't]

I don't understand how they're going to know you use the service, unless you pay by credit card. I use PayPal for all online purchases. You can make up any "delivery" address that you like. If you use a VPN, Netflix won't know where it's going, and Comcast won't know what you're getting. Of course, few people bother with this privacy nonsense.

Civilization costs money

[Uberbah]

Do you

A) hate civilization
B) want to freeload off of everyone else that pays for it?

Let me edit my...

[Mike Van Pelt]

"Reasons to never ever move to Chicago" file...

$ vi reasons-to-never-ever-move-to-chicago.txt

PageDown

PageDown

PageDown

PageDown

PageDown

PageDown

dang... how many pages are there?

PageDown

PageDown

PageDown

PageDown

Shoulda' done this to start with.

G

wait... wait... wait...

ERROR: /tmp file system full

... crap.

It's not just sitting around doing nothing

[rsilvergun]

sorry, I wasn't clear. It's not just sitting around doing nothing. The ultra wealthy are hording wealth in order to create artificial scarcity so they can use their control of society's wealth to bend it to their whims. There's more too it than that in order for them to stay in power, but the basic element is conservationism. e.g. making sure _nothing_ changes. Controlling all of society's wealth is a very effective way to achieve that. The constant desperation brought on by artificially induced poverty makes everyone else very conservative and very opposed to change out of fear that things will get worse; that you'll lose what little you have. The 1% use this to keep folks from questioning why they have so little when the top guys have so much. It's also very important that no one ever notices that if the 1% didn't exist we could all live pretty well. This isn't me pulling $h!t out of my proverbial back side. We're already producing enough food to feed the world's population. And giving poor folks access to birth control & education has shown to control population perfectly (maybe even a bit too much). We can do it, but not when we've got 1% of the world consuming 60% of the resources.

Sorry, again it's complicated. I don't know how to boil it down to sound bites that work. I've got a few (e.g. "I don't want insurance, I want health care") but if I was as good as Karl Rove I'd probably use those skills for the other side. With everything in the world so horrible it takes a saint to use that kind of power for good... :(