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A 'Netflix Tax'? Yes, and It's Already a Thing in Some States (usatoday.com)

An anonymous reader shares a report: Your monthly bill for Netflix, Amazon, Hulu and other streaming entertainment services could go up soon as states such as Illinois try to find ways to offset declining sales taxes and other revenue shortfalls. Chicago, Pennsylvania and Florida have already passed a so-called Netflix tax, and cities such as Pasadena, Calif. have broached the issue. These taxes can translate to additional fees of less than $1 each month to consumers. But over the months -- and tacked onto multiple streaming subscriptions -- they might add up to $50 or more each year. Netflix, consumer tax groups and tech trade organizations have voiced their opposition to such taxes, warning they can be unfair and deter innovation. Some opponents have initiated legal challenges, and at least one state has shelved plans after a court decision. But state and local governments aren't likely to halt fresh efforts as falling pay-TV subscriptions and video rentals mean there's less opportunity to tax cable bills or charge sales tax at the cash register.

4 of 135 comments (clear)

  1. govenrment loves telecom by stabiesoft · · Score: 4, Interesting

    Taxes and fees are crazy high on phone (land is really crazy with the subscriber fee). The local city utility loves to tack on weird stuff onto the electric/water/trash/sewer bills. They just figure people will not notice. Netflix is a service almost like telco, so really I'm surprised it took them this long.

  2. Sales Tax is Tax, anything else is penalty by evolutionary · · Score: 3, Interesting

    Okay, this is getting word and legally questionable. Sales tax, is exactly that. You can tax non-essential services/goods. If the shift is from one industry to another for the same service type, it is taxed the same way. Move from local video store to online streaming makes not difference unless implemented badly: you are taxed for the service regardless of how it's provided. If you add fees to specific services, that is basically a luxury or sin tax which is traditionally used to dissuade people from using that product or service. Examples like tobacco, alcohol or the like. Problem is if you add what is basically a sin tax on streaming, that is a penalty on the entire industry. And a sin tax on streaming is a pandora's box. To make it fair or impartial you'd have to apply the same to movie theatres, theatre, or anything that delivers an entertainment service. It's high questionable which is why one court threw it out already. These states need to either raise taxes in general (which they don't do because it would cost some officials their elected positions) or find a justifiable sin tax on some industry that you can prove does public harm. Otherwise, it's just a way to try to hide an additional tax so official can say they haven't raised taxes in general. It would be curious to know why these states focus on video distribution services. As far as justifying an official sin tax on the industry, that unlike tobacco or alcohol, will take more studies/proof to justify. Better off taxing marajuana. You can easily put a sin tax on that which is ethically/legally/politically acceptable, and you'd get tons of revenue anyway. We are about to do that in Canada, and we aren't falling apart. (We've been using tons of weed for years with the police mostly turning a blind eye and we're doing okay so far, the new laws next year will get a ton in taxes).

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    "Imagination is more important than knowledge" - Einstein
  3. Re:Good by Anonymous Coward · · Score: 2, Interesting

    There should be no such things as income or sales taxes, these things are extremely regressive. There should only be one type of tax, a wealth tax levied against an individual or company's total net worth. Say, 1% every year federal and 0.5% state. No other taxes at all, full stop.

  4. Re:This is what happens when you can't raise taxes by Gravis+Zero · · Score: 4, Interesting

    Or, alternatively, this is what happens when you destroy the job market...

    A) If environmental regulation is slowly becoming onerous then it's a sign you are doing something very wrong and should change. Frankly, companies that pollute the environment should be 100% financially responsible for cleaning it up.
    B) The renewable energy market has created 10x the number of jobs that it's "destroyed".
    C) Coal jobs are being lost natural gas, nothing else.

    The rich already pay 80% of all tax in the US

    $100K/yr isn't what it used to be, so not a qualifier for being "rich". How much are the people that make $1M/yr paying? Also, instead of just the income tax, let's include ALL taxes. For some reason taxation is highly regressive which means the people with the least end up paying the largest percentage. Let's turn that around.

    while the "poor" 45% Democrat voting block who thinks the rich don't pay enough pay ZERO taxes

    The poor pay zero taxes because their pay hasn't increased for the last 40 years while the value of their income has decreased for the last 40 years which has caused them to fall below the poverty line. Yes, for some reason, you can have a full time job and still be impoverished because assholes aren't paying you what you are really worth.

    but enjoy all the general benefits as well as free healthcare, free housing, free food, free phones...

    Literally none of those things are free. I would also point out that Republicans voters are the ones who benefit the most from the ACA which is why despite having majority control of The Senate, The House and the presidency, Republican politicians were incapable and unwilling to reduce the coverage by the ACA.

    That said, the federal government as well as most states mentioned don't have an income problem, they have a spending problem.

    Yeah, who needs the police, firefighters, hospitals, schools or any of that shit, right? How about we cut subsides to all energy companies and farmers? Then lets go further and tax companies/farmers the exact amount of money that it costs to clean up their pollution. The free market would absolutely eviscerate the market of polluters as it exists today and solar would be the preferred energy source and beef would be 25x the cost of chicken.

    I'm all for the free market as long as they are taxed based on the amount of damage they do to the planet.

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