Hacker News Reader

Comment by rayiner | Hacker News Reader

The Internet is taking things that were traditionally taxed (cable TV) and moving that activity to things that aren't taxed (content delivered over the Internet). Television is just the tip of that iceberg. What's the general solution to that problem?

And while I'm probably on the same page as you re: Chicago's profligacy, let's face it: Chicago needs to raise money. Economically, aren't consumption taxes better than raising the same money from income or property taxes (or head taxes or corporate taxes)? I'd argue that instituting a city income tax or raising property taxes will move more people out of Chicago than taxing Chicago consumers[1] for internet services.

[1] The effective incidence of sales taxes is complex. But I imagine most Internet services will be able to pass most of the cost onto consumers.

View on HN

Your statement isn't really true. Netflix does charge sales tax in some states, and as a company they are subject to other forms of tax in the the locals where they have a business nexus.

City governments will need to adapt to the changing markets and find new revenue streams for sure, but I see the current move as anticompetitive and a bald faced money grab. Some people in the free market have decided that the record stores, sporting events and other local entertainment in the Chicago area are not as good of a value as what cloud services provide. The answer is not to hold these people hostage and tell them they have to pay up regardless. The solution is to take a hard look at what is driving consumers away from local entertainment options and find ways to help your local companies adapt to a changing market.

Solution: Smaller government

That's a slogan, not a solution. Purely at the local level, I like things like street lights, roads without holes in them, public parks, libraries, functioning emergency services and so on. So do a lot of people who live in cities, and they get upset when those services are cut. Now those things involve a cost, so the problem we have is how to minimize that cost and distribute it equably and efficiently. 'Starve the beast!' is no more of a viable plan than 'Eat the rich!'

Fun fact: Chicago has a budget of about $9 billion for 2.7 million people, plus Cook County has a budget of $4 billion for 5 million people. San Francisco City and County has a budget of $7 billion for under a million people. Fairfax County, where my parents live, has a 3.7 billion budget for about a million people.

Chicago and Illinois are not high-tax high-spend jurisdictions. The top income tax rate in republican Virginia is almost double the historical income tax rate in Illinois. Their fiscal problems are the result of being low tax jurisdictions with moderate expenditures.

While in theory I support smaller government in practice I'm pretty sure I should be grateful for large government since without it I would not have my private sector software development job. I’m a totally blind software developer and one of the major reasons the screen reading software I use in my job is kept up to date is section 508.

Cable companies are very interesting local phenomena, since they're covered by a fascinating array of taxes and fees not applicable to the average business. Those taxes apply to both the business and the consumer.

A uniform sales tax seems more palatable (as an alternative to an income tax, not in addition to one); however, this is not a uniform tax, it's a targeted tax on streaming services and other Internet services.

Reply on news.ycombinator.com