Can New Chicago Taxes On Netflix, Apple, Spotify Withstand Legal Challenges? 188
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.'"
Taxes (Score:2, Interesting)
Legalized theft.
You want what someone else has, and you're willing to steal it at the barrel of a gun.
Fuck you.
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Move to Greece. Hardly anybody pays taxes there, and everything is GREAT!!!1
Re:Taxes (Score:4, Interesting)
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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!
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What services did the city of Chicago provide that Spotify and Netflix make use of to serve content to customers?
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Or more specifically, Netflix content travels over Chicago right-of-way.
Re:Taxes (Score:4, Insightful)
What if I live in Chicago, but only use netflix while out of state?
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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
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Personally I think 9% is outrageous. It had better come with a set of Monster network cables
http://taxfoundation.org/blog/... [taxfoundation.org]
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 (Score:2)
It's only one degree hotter. The frog will be fine
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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.
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Chicago's move is rational. It placed a use tax on entertainment, then argued that streaming entertainment is
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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 (Score:4, Insightful)
And even then it is not free. Lots of hoops to jump through. Far more than the corporate welfare system we have.
Re:Taxes (Score:4, Insightful)
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.
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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.
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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
Re: Taxes (Score:2)
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.
Civilization costs money (Score:2)
Do you
A) hate civilization
B) want to freeload off of everyone else that pays for it?
time to reference the Beatles Taxman (Score:5, Informative)
Wasn't it marginal? (Score:5, Informative)
Yeah, but I still don't see the problem (Score:4, Insightful)
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...
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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.
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At 8% interest and $25 a month from the month you are born till you are age 72 you would be a multi-millionaire.
Re: Yeah, but I still don't see the problem (Score:1)
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.
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Basically, you can only spend so much (Score:3, Insightful)
Now ta
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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 inves
You can't really do bankruptcy anymore (Score:2)
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
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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
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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.
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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.
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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...
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Re: You can't really do bankruptcy anymore (Score:2)
Bush also removed capacity for default on student loans in 2005.
They are not your friends.
Re: Basically, you can only spend so much (Score:2)
Good post thanks
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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.
It's not just sitting around doing nothing (Score:2)
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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 strat
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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 sho
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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
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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.
I think Warren Buffet was asked this (Score:2)
There is another possibility too.. (Score:4, Insightful)
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.
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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 pl
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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.
Another Reason...not to live in Chicago (Score:5, Informative)
In case the crime and murder rate wasn't enough.
Oh get over it. (Score:2, Troll)
Re: Oh get over it. (Score:1)
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.
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My biggest complaint would be (if I lived in Chicago) how this tax is structured. It is a "use tax" which mean I have to keep track of everything that falls under this tax and remember to put it down on the appropriate tax form at tax time. It is a mess. It will have the same problem every other use tax does in that it will have a recordkeeping burden and that will drive non-compliance more than anything.
If they are smart they'll have a tax table where you can make a good faith estimate of your expenditures
Re:Oh get over it. (Score:5, Insightful)
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.
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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
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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
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How intellectually dishonest for you to omit that there are no sales taxes in Oregon.
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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
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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.
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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.
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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
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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 co
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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 t
In the famous words of Nelson, "Ha Ha" (Score:1)
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 (Score:5, Interesting)
Will the last person to leave Chicago please turn off the lights?
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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.
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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,
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I left the city 15 years ago thank god... but im still stuck in Illinois.. which is a whole nother shit storm.
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Cdn servers are a physical nexus (Score:1)
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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... [netflix.com]
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.
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2. If a chain of stores transferred ownership of stor
What the fuck?!! (Score:5, Interesting)
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
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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 (Score:2)
...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/... [chicagotribune.com]
Cable? (Score:2)
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 l
Comment removed (Score:3)
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Curious (Score:2)
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 t
When does it end? (Score:2)
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 (Score:2)
New Chicago? That was a planet featured at the beginning of "The Mote in God's Eye" (Niven/Pournelle)
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The rebels renamed it Dame Liberty.
Chicago... (Score:1)
they're handling this incorrectly (Score:1)
I remember my first years on Usenet (Score:2)
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.
What most will do (Score:1)
The real issue here... (Score:1)
How Will They Know? (Score:2)
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.
Let me edit my... (Score:2)
$ 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.
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Are you saying they should tax database, records, fields, or heck, maybe they could tax SQL clauses!
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Taxation of Illegal Income in the United States [wikipedia.org]
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.
Re: Cut da Chicagoians a break! (Score:1)
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.
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You're an idiot.
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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 [chicagotribune.com]. (Borrowed this from another poster).
This tax is an indication of a Death Spiral [wikipedia.org].