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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.
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.
on the rich. The government still needs money to run. And despite what the rich's media outlets tell you there's no magic 'government waste' to cut that makes the need for taxes go away. So you either start cutting essential services (fixing roads, police, fire dept, etc. Not listing schools, we already cut those) or you come up with taxes like these that target the working class.
The Working Class are the only ones with any money that don't have multi-billion dollar media empires and lobbying arms sticking up for them. The used to, we called those 'Unions' an shut them down because they got a little corrupt and so instead of fixing them we threw baby out with bathwater.
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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).
"Imagination is more important than knowledge" - Einstein
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.
Illinois sales tax revenues (2016 is the last table available) are actually rising:
In fact, sales tax revenues are up around 10% over 4 years. If you look at the table, excise taxes are flat and gas taxes are up. Income, gaming, and other taxes are down. Income tax being down is a no brainer with the economy how it is.
If sales tax revenues go up 10% over 4 years (in a state with one of the highest sales tax rates in the nation) and they are looking for more ways to tax, then there is a serious problem with fiscal policy. Even if you factor in the decline in income, gaming, and other taxes the total decline is 10%. If a 10% decline over fours years wreaks that much havoc, then, well, there is a serious problem with fiscal policy.
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.
In the case of Illinois, that is exactly what it is. Can't speak for the other places, but Illinois is on the brink of insolvency. Apparently corruption does eventually weigh to heavy.
Probably not enough. Consider property taxes where I live run about 2.5% They also tax biz property. Same rate.
This is my favorite Item on my DSL (Century Link) phone bill. What the heck is that. It's not a govt tax. $5 goes to Century link. So why isn't it part of the advertised price. If it's a gov't allowance they must earmark to pay for expansion then why hasn't my DSL service improved in 20 years?
I also wonder why companies that do sell what they sell at the advertised price (like T-mobile does) don't make a bigger deal of their honesty (at least honesty about the cost) because customer's hate these creeping fees
Some drink at the fountain of knowledge. Others just gargle.
The Value Added Tax system in the EU means that ALL items - except a small list of essentials set by individual countries, e,g, food and books in the UK, are taxed at about 20%. So that will be hitting all new services from very early in development. We can debate whether this is a good thing or not - but it does avoid the silly levels of complexity that the variable rates found in the US produce.