Politics & Policy

Stop the Streaming Tax

(Marcel De Grijs/Dreamstime)
Another bad idea from Chicago.

Not content with making explicit attacks on Uber, AirBnB, and the “sharing economy” as a whole, Democrats have launched an even more egregious attack on something that rivals sex, alcohol, and food on Millennials’ “can’t survive without” lists: streaming entertainment.

As of July 1, 2015, citizens of Chicago who enjoy their Netflix, Spotify, Pandora, Amazon Prime, Xbox Live, and/or PlayStation Network subscriptions are now subject to the city’s 9 percent “Amusement Tax” for the privilege. Further, should you decide to digitally rent a movie or videogame via these services, the 9 percent tax would be applied for every rental. In other words, Chicago now taxes its citizens 9 percent on their $99 annual Amazon Prime subscription because of its instant video/music service, plus 9 percent for each $3.99 digital rental through the same service. The same applies for rentals and music services offered directly from Microsoft and Sony. Fans of Sony’s PlayStation Network ecosystem are hit hardest: a 9 percent tax each on their PlayStation Plus subscription, PlayStation Music, PlayStation Now (videogame streaming), and Sony’s recently introduced PlayStation Vue live-TV service. Throw in other rental/subscription services such as Hulu, Gamefly, Google Play, HBO Go, iTunes, and Vudu, and you get a sense of the sheer breadth of this tax on Chicago consumers’ digital lives.

It’s not just individual consumers who are targeted by Chicago Democrats. Small businesses that use cloud-based services such as Microsoft Office 365, Google Apps for Business, or Amazon Web Services are also subject to a new tax for such use. Pay for access to Monster.com’s database of résumés? Taxable. Pay for access to potential hires’ consumer-credit scores? Taxable. Are you a law firm and subscribe to Westlaw or LexisNexis? Taxable.

Considering these services’ primary consumer demographic, it at first seems odd to see Democrats publicly challenge them through regulation and taxation, since their youngish base are the ones who do the most streaming. However, scratch the surface and you’ll see that the rationales are all too familiar for the progressive Left. Regarding Uber, Hillary Clinton and Bill de Blasio are beholden to their union donors, who are offended by Uber’s worker classifications and good old-fashioned competition. For Chicago Democrats, they have to shore up a $1 billion budget shortfall somehow, and brick-and-mortar video rentals have gone the way of travel agencies. However, unlike prior examples of Democratic attacks on business and consumers via tax and regulation, these new fronts are far more frequent and visible to the average consumer. All a Chicago millennial needs to do is unlock his smartphone and count the apps that are now more expensive because of a rule interpretation.

Put Clinton and Sanders on blast and ask if they’re open to new taxes on tens of millions of gamers, families, and business owners enjoying the fruits of an open Internet marketplace.

Republican candidates have been granted an excellent opportunity thanks to Clinton et al. The standard GOP retorts to these actions have been broad and vague talking points consisting of Democrats’ attacking “small businesses” or increasing taxes on “everyday household goods.” Specificity works far better; especially household names like Netflix, Amazon Prime, Uber, and Xbox Live. A Millennial may yawn at a speech on income-tax simplification, but mention Democrats’ plans to make it more expensive to binge watch Sons of Anarchy and play DOOM online, and watch the pitchforks selfie sticks come out faster than you can say “listicle.”

Jeb Bush has already gone on the offensive against Clinton’s Uber assault, and Ashton Kutcher and Kate Upton have publicly called out de Blasio, further bringing the issue into the average American’s mainstream consciousness. However, the younger candidates — Cruz, Rubio, Jindal, and Walker — should highlight what just occurred in Chicago, and signal the warning to the alleged Democratic voting bloc. It would be the height of naïveté to believe Chicago’s new tax will remain within the city limits, so put Clinton and Sanders on blast and ask if they’re open to new taxes on tens of millions of gamers, families, and business owners enjoying the fruits of an open Internet marketplace. “Out of touch” would be an understatement.

— Samuel A. Rosado is an attorney residing in New Jersey. You can reach him on Twitter at @SamARosado.


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