As of 1 July, Chicago now has 9% tax on Netflix and probably most other streaming sites

[OnlinePoker]

Starting Wednesday, the city of Chicago’s new "cloud tax" went into effect: it imposes a 9-percent tax on "patrons of amusement," including those services that are "delivered electronically."

In short: Netflix users in Chicago will be paying a little extra for their subscriptions pretty soon.

"We will be adding it to the cost we charge subscribers," Anne Marie Squeo, a Netflix spokeswoman, told Ars in a statement. "Jurisdictions around the world, including the US, are trying to figure out ways to tax online services. This is one approach."

http://arstechnica.com/tech-policy/2015/07/chicago-netflix-customers-your-bill-is-about-to-up-9-percent/

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What an incredibly regressive tax.

[yeoman6987]

1. Liberal cities have been doing some questionable things lately

Regressive taxes....raising rents, etc.

[malthaussen]

2. Well, you know, all the blood hasn't been squeezed out of the turnip yet.

People should work harder and stop wasting time being "entertained." JEB told us so.

-- Mal

[jberryhill]

3. "What an incredibly regressive tax"

I don't know anything about the demographics of Netflix subscribers.

Can you back up the notion that it is "regressive" with information on the income distribution of Netflix subscribers?

Given that broadband internet access is a pre-requisite....



Okay, so how is this "incredibly regressive".

[JustABozoOnThisBus]

5. First, there's no statistic on Netflix users by income level ...

... then, there's no statistic on percent of income spent on Netflix, etc, broken down by income level.

I'm not sure what your data show, except that the wealthier white people have more access to the internet. No surprise there.

Generally, sales taxes are regressive, taxing a higher percentage of income as income decreases.

[jberryhill]

9. That's why I questioned the assertion it was regressive

http://blueshiftideas.com/reports/101305NetflixHasRoomtoGrowinLowIncomeHomesButNewFeesUnlikely.pdf
Netflix Has Room to Grow in Low Income Homes


"I'm not sure what your data show, except that the wealthier white people have more access to the internet. No surprise there."

Okay, so, would you consider an excise tax on golf balls to be "incredibly regressive"?

[mythology]

10. But it stands to reason that Netflix would be more

Popular with higher income people, especially for streaming as that requires solid Internet which as shown above is correlated with higher income.

[whatthehey]

8. It's not the demographics that matter

TV, rightly or no, is an almost universal product. Netflix is actually cheaper than regular cable TV so is hardly the preserve of the rich. The regressive part comes in because it's a larger % of income to lower-income individuals. Netflix costs $8 a month. That 72c a month is unlikely to break anybody's bank, but it's going to be a more noticeable bump to a minimum wage person than a 6-figure guy.

It's regressive just like any fixed rate is - it hurts the poor more than the rich. The more cities fund with marginal tax rates that increase with income and the less they tax anything at all bought by most of the general population at fixed rates, the less regressive the tax burden will be.

The rich want all sales tax funding and the poor want all income tax funding for exactly this reason.

[jberryhill]

11. "Netflix is actually cheaper than regular cable TV"

No it's not.

Show me where (broadband internet service + stream decoder device) + (7.99 a month) is cheaper than basic cable.

This is the second thread I've seen recently in which broadband internet service is assumed to be free. I am clearly not living in the right service area.

"It's regressive just like any fixed rate is - it hurts the poor more than the rich."

A 5% tax on golf balls impacts what demographic the most?

[whatthehey]

13. Right here. WOW.

My broadband is 30/mo (they have a deal better now at 25). Can't touch a cable tv package under 79. Can afford even non-discount broadband rate at 52 (and it's never actually that if you call them - they renew the intro rate) and all 3 big streaming services less than cable TV.


https://sales.wowway.com/OnlineStore/PricingAndPackaging.aspx

So Yes. It is. Proven.

[jberryhill]

15. Like I said

I'm clearly not living in the right service market.

My location is not on that map.

[whatthehey]

17. There are other providers, and millions of people are on that map.

[Spider Jerusalem]

16. That would be "Chicago", in fact

"stream decoder device" = PC, laptop, tablet, smartphone, something most people have and would probably have anyway (shouldn't be assumed as part of the cost unless you're going to add a TV to the cost of cable).

Basic 10Mbps broadband (sufficient for streaming 1080p video), $19.99/mo + Netflix @ $8.99/mo = $27.98/mo.

Basic cable and broadband package, $39.99/mo. Twelve bucks difference, there.

[LiberalAndProud]

4. Chicago needs a new city council.

But so does my town, and it doesn't happen. The power players continue to play the power.

[Spider Jerusalem]

6. If you can afford the cost of broadband internet and Netflix on top of it...

an extra 89¢ a month shouldn't be an issue. If it is an issue, you should rethink your budgeting priorities.

[jberryhill]

12. Broadband is apparently free

I pointed out above the demographics of broadband and I am told it apparently does not reflect the demographics of Netflix' market. How that is possible, I have no idea, but there you are.

[whatthehey]

14. No. Not free. Just cheaper and more powerful than cable TV.

[Maedhros]

7. Hey! Chicago's city council has some cable providers to prop up!

Don't get down on them - they're just serving their corporate masters.