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back to article Super Cali goes ballistic, considers taxing Netflix

More than 40 cities in California are considering a tax on streaming services – dubbed a Netflix tax – claiming that the tax system needs updating for the internet era. The news comes as AT&T announces a new streaming service, DirectTV Now, which the company hopes will see people discard their cable boxes altogether for over …

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  1. Eddy Ito
    Meh

    Well they did receive a small cut from the sales tax of CDs and DVDs that were purchased in the particular city but it's going to get really interesting when it comes down to streaming on mobile phones. I assume that the tax will be applied to the location where the bill is sent but with smart phones being mobile and all, that could be granny's house in Tennessee or even two towns over where the tax is lower or non-existent.

    1 0 Reply
  2. Kinesia

    The answer isn't to tax the individual services but just to tax corporations properly in the first place. No exemptions or exceptions, just tax them.

    9 3 Reply
    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Right on. Then the corps just pass the taxes thru to their customers invisibly and no one ever seems to realize how far over they are being bent by Big Daddy Government. Why, it's the evil corporations that are paying for everything, don't you know...

      3 8 Reply
      1. Anonymous Coward
        Reply Icon
        Anonymous Coward

        I'm always amazed when folks don't understand cause and effect. They act as though corporations wait till the end of the year to see what their tax bill comes out to be....

        0 0 Reply
    2. Mark 110
      Reply Icon

      Doesn't the US have VAT - just tax everything at a flat rate. Much simpler.

      As for taxing corporations, theres a good economic argument (not one I entirely go along with) for not taxing them at all (tax any profits they pass to shareholders instead) to give them more resourrces to invest and become successful.

      1 0 Reply
      1. Charles 9
        Reply Icon

        One, the US does NOT have a VAT. They use income-based taxes because they're harder to dodge than consumption taxes which can be easily hidden under the table. A proper VAT requires infrastructure not present in the US.

        As for taxing shareholders, an increasing strategy is to reward in nonmonetary ways that can't be taxed immediately.

        0 6 Reply
        1. Cuddles
          Reply Icon

          VAT

          "One, the US does NOT have a VAT. They use income-based taxes because they're harder to dodge than consumption taxes which can be easily hidden under the table."

          Except that's not actually true. The US does have VAT, they just call it "sales tax" instead, and it's done at a state or lower level (in this case, individual cities) rather than at a federal level. There are absolutely no principles or nonsense about making tax dodging more difficult, it's just the usual cries about state rights resulting in an incoherent mess that makes things more difficult for both the taxers and the taxees.

          As for the complaints that it would be too difficult to bill something like this, I don't see how there's any issue at all. When you sign up for a service, you're generally required to give your address so that service can actually be provided. No amount of jumping around proxies, VPNs and the like can avoid the fact that Netflix know where you live and are able to bill you every month. The only difference VAT would make to the consumer would be that your bill would be slightly higher.

          4 0 Reply
          1. Charles 9
            Reply Icon

            Re: VAT

            That's NOT a Value-Added Tax. It's a generalized transaction tax so is ALSO assessed BETWEEN wholesalers (which are EXEMPT in the US; trust me, I've looked it up; that's why B-to-B is watched closely). Each link of the chain needs to pay up, and this is why VAT can't be dodged as easily: because wholesalers would be in a better position to detect and report something fishy.

            1 0 Reply
            1. Anonymous Coward
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              Anonymous Coward

              Re: VAT

              VAT is also the cheapest tax to collect per pound collected.

              0 0 Reply
              1. Dr Stephen Jones
                Reply Icon

                Re: VAT

                "VAT is also the cheapest tax to collect per pound collected."

                No it isn't, property taxes are the cheapest to collect. Avoidance is very low: houses don't generally move around you know who owns them. Google "unpaid VAT HMRC" and you'll see how much VAT is owed.

                0 0 Reply
                1. Lotaresco
                  Reply Icon

                  Re: VAT

                  "VAT is also the cheapest tax to collect per pound collected."

                  "No it isn't"

                  <panto>Oh yes it is!</panto>

                  Here's a clue, collection rates are not a representation of the cost of collection of a tax.

                  0 0 Reply
          2. Trevor_Pott Gold badge
            Reply Icon

            Re: VAT

            Why would Netflix need to know where I live? Rechargeable credit cards are easy to obtain. Even ones based in other jurisdictions.

            0 0 Reply
    3. Dr Stephen Jones
      Reply Icon

      Tax what?

      I don't necessarily disagree, but what are you taxing exactly?

      Are you taxing a corporation just for being a corporation? Or profits earned in the USA? Uncle Sam is very keen to repatriate foreign earnings, I would expect Trump to go after Apple and Microsoft .

      0 0 Reply
      1. Trevor_Pott Gold badge
        Reply Icon

        Re: Tax what?

        "Uncle Sam is very keen to repatriate foreign earnings, I would expect Trump to go after Apple and Microsoft"

        Trump is the ass cancer that killed Uncle Sam.

        0 0 Reply
  3. Anonymous Coward
    Anonymous Coward

    The taxes on cable made some sorta sense

    They were franchise fees, and covered the regulatory costs of dealing with a cable company running wire all over the city, producing local content for the city channels most cable companies offer, etc.

    Some places tax satellite TV, and that's a lot harder to make a case for since they don't have the local content and the city has NOTHING to do with a homeowner putting a dish on his roof. They only did it because they saw it as "lost revenue" from people who didn't subscribe to cable. Now they're trying to do the same thing with streaming, for the same stupid reason.

    If they want to tax something, taxing internet (since it is using wires strung all over public right of ways just like cable/telephone do) would make a whole lot more sense than taxing your Netflix. Though this really should be folded into property taxes, it doesn't make sense trying to charge tax on dozens of streaming providers when they already have a system set up for it - I guess the big commercial property owners who city councils are all buddy buddy with would discourage such an idea though. It was probably their idea to replace any lost cable franchise revenue with satellite and streaming taxes in the first place!

    0 0 Reply
    1. joed
      Reply Icon

      Re: The taxes on cable made some sorta sense

      Honestly, not to be rude but fu for attaching another BS to property taxes. I consider taxes as necessary evil (some things are needed but politicians come up with more and more of "necessities" that needed funding) but for number of reasons use tax is much better here as it gives individuals a choice. Not everyone cares for or has infrastructure to stream (and making everyone happy with expensive ideas like your nbn just to build that infrastructure is just as welcome by some). Big players (past startup phase) can easily levy the tax on behalf of states (all them claim to be "big data" players so even complexity of local taxes in US should not be a problem to them, right). After all, the subscriptions have to be paid with a CC that's linked to a real person (with enough detail to even verify that person's age etc).

      1 0 Reply
  4. MNGrrrl
    Trollface

    Tax is a blessing

    The irony here is that network neutrality may get a boost when companies realize that if they let the genie out of the bottle to try to slurp up money, the government may decide to get in on it and now we've suddenly got 50,000 new kinds of taxes for everything, and what a logistical headache that's going to be for businesses. But I mean, hey, that's a nice little racket you got going there... shame if something were to... happen... to it. In reality, all that'll happen is all these companies will just move overseas to tax shelters, and the laws will be left on the books, collecting nothing, but ensuring that internet startups in the country pretty much 404, and along with it, jobs, growth, and the economy. But I mean, it's all cool right... as long as multinational companies win, we do too, right? Uhh, right guys? Why are you holding pitchforks and torches? Guys?

    3 0 Reply
  5. Wade Burchette

    I'm the taxman

    If you drive a car, I'll tax the street.

    If you try to sit, I'll tax your seat.

    If you get too cold, I'll tax the heat.

    If you take a walk, I'll tax your feet.

    'Casue I'm the taxman. And your working for nobody but me.

    8 3 Reply
  6. Ole Juul

    gate keeping

    The world's oldest business model.

    2 0 Reply
  7. allthecoolshortnamesweretaken

    I propose a Facebook tax. With the revenues going exclusively into education.

    6 1 Reply
  8. bombastic bob Silver badge
    FAIL

    taxing the intarwebs is stupid

    this debate has gone around at the federal level before, and has been summarily REJECTED.

    How in the HELL are they going to BILL you on this, anyway?

    All you'd need to do is use a PROXY to avoid the damn tax!

    What a bunch of MAROONS in Sacramento, anyway. They should stop spending money like it's "other people's money" [whoops, it IS] and buying votes with it so they can retain their power and continue the vicious cycle of tax, spend, tax, spend, tax, spend... [I voted Republican]

    2 1 Reply
    1. Charles 9
      Reply Icon

      Re: taxing the intarwebs is stupid

      Can't proxy providers be pressured into disclosing their customers or risk a blockade at points of entry?

      0 0 Reply
      1. The_Idiot
        Reply Icon

        Re: taxing the intarwebs is stupid

        @Charles 9

        One of the fundamental benefits of any good proxy provider is that they don't know, for any point in time activity, who is doing what. They charge for an account - by a combination of shared IPs, encrypted traffic and not keeping logs, they take positive steps to be unaware of what account holders actually _do_. That's sort of the point :-). I'd suggest that taxing every VPN provider for what their customers _might_ be doing would be a little much... but then I'm an Idiot (blush).

        0 0 Reply
        1. Charles 9
          Reply Icon

          Re: taxing the intarwebs is stupid

          But the US can apply pressure on them. If the US can crack the legendary code of silence of Swiss banks, I suspect they can make ANY proxy server cough up or risk getting their IPs blocked. Hard to get US business if your IPs are blocked by ISPs (under FCC mandate or the like) at points of entry.

          0 0 Reply
    2. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Re: taxing the intarwebs is stupid

      Percentage x Fees Paid.

      0 0 Reply
  9. Anonymous Coward
    Anonymous Coward

    Why?

    The unasked question here is 'why are these cities short of cash in the first place?' That leads to the next question, 'where is all the tax money they collect going?'

    When we get answers to those questions the purported reasons for this additional tax might become clear. Is it greed on the part of the council or does one, or more, of the council have a pork barrel to fill for the family or are they paying to prop up such things as uneconomic renewable energy?

    Yes, we know that most councils are dumb, but this dumb?

    5 3 Reply
    1. Charles 9
      Reply Icon

      Re: Why?

      The simple answer is that localities actually don't collect a lot in taxes relatively speaking. Most of the taxes are STATE taxes and in this case go to Sacramento, who gets to decide how to divvy it, and it can get complicated since each region has its own pulls and influences. Many localities can get shafted in which case they're SOL because most people don't like new taxes, especially in the local level where people can easily gripe to the Council, not like at the state level where serious protests require a lengthy trip to Sacramento.

      2 0 Reply
  10. Florida1920
    Flame

    Tax Tweets

    If we have to endlessly hear about Trump's latest ignorant Tweet, at least let the government make some money from it. He doesn't believe in paying taxes, because he's smart. Put up or shut up, Donnie.

    Here in Florida, where most middle-class voters idiots think (?) Trump will lower their taxes, we pay sales tax on Internet service and Netflix. Oh, and Amazon orders too, as they now have a distribution center slave-labor camp in our state, even if the purchased item ships from out of state. I don't have a Hulu account so can't speak for them. The only differences between governments and organized crime are, the gangsters have better suits and nicer cars.

    1 0 Reply

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