Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Chicago successfully taxes streaming services

cbsnews.com

Post reply on HN
Print view View original

41–50 of 222 posts

Re: Chicago successfully taxes streaming services

#41

Post by boulos »

shittyadmin wrote: post #25
burlesona wrote: post #5

This stuff makes sense for cities, it’s just frustrating how much more difficult it makes it to operate a “mom and pop” software business. The complexity of potentially complying with hundreds of state and municipal governments - not where you are located but where online purchases originate - is a pretty significant deterrent to setting up a small side business. Imagine if every food truck had to pay taxes based not…

You don't reside there, you're not liable to abide by their laws. I run a small US company, I don't have to comply with GDPR for example. Same applies here. I don't see why any company would implement this, perhaps appeasing regulators at the federal level.

I assume you mean well, but it’s not about your residence (or for businesses the place where they are incorporated) but rather where you do business. Just because I’m in California doesn’t mean I can do business in the EU without complying with their laws. Same goes for Chicago.

You’re not required to do business there, but they can fine you for non-compliance if you are doing business.

Note: all of this is in reference to “software companies” as the GP said, and doesn’t touch on “corporate nexus” and stuff like that.

Re: Chicago successfully taxes streaming services

#42

Post by boulos »

Mirioron wrote: post #32
reaperducer wrote: post #12

Earlier quoted context omitted.

It's an entertainment tax. Netflix supplies entertainment to people in the city of Chicago, and so the city of Chicago taxes that entertainment. Same thing with concert tickets and other forms of entertainment.

And if every city and town has their own tax that's different in some way? Then what? Or alternatively, could Netflix ban all residents of Chicago?

Yes, Netflix chooses to serve Chicagoans, and if they’d prefer not to, they can. There have been a few “make the customers angry, so they write to their representatives” attempts throughout history, but I doubt a 99 cent tax for Netflix is enough to risk it.

As a related thing, look at Spotify vs Apple on the App Store. That 30% is material.

Re: Chicago successfully taxes streaming services

#43

Post by echelon »

Shivetya wrote: post #14

Chicago is in the hole for nearly thirty billion dollars. They have been floating the idea of a ten billion dollar bond with the debt structured in a way which lets current politicians escape the fallout from its payment and not having to raise property taxes. The state of Illinois is not well off either with debts estimated at the low of one hundred thirty billion to two hundred fifty billion. An Illinois proposal j…

Could they raise more money by locally legalizing more "sins" and heavily taxing them? Something of a cross between Las Vegas and Colorado could pull in a lot of revenue.

Re: Chicago successfully taxes streaming services

#44

Post by rrrrreeeee »

lotsofpulp wrote: post #36
rrrrreeeee wrote: post #31

Earlier quoted context omitted.

Do the employees and employers not pay into a separate fund that cannot be touched? I fail to see how it's the fault of the pensioners. It's absolutely archaic if the future taxpayers have to pay for a retirees pension. In Canada we have pension funds that are separately funded entities that are payed into over an employee's career.

How do you ensure the funds are invested properly, and not in a nephew's real estate development project? How do you ensure the correct assumptions are used in calculating how much to contribute into the fund in the first place? You can adjust mortality tables and investment return assumptions to make the benefits seem cheaper than they are. The government can even choose to forego making their understated contributi…

The employer isn't liable for the pension at all. Neither is the employee. All they do is pay into the fund. Instead, there is an entirely separate legal entity (the pension fund) that controls and distributes the assets. The fund releases reports regularly on the health of the fund. The contribution calculations are usually included in those reports. The investments by pension funds are usually in long term infrastructure assets like highway 407 in Ontario, or various property management companies such as Cadillac-Fairview. https://en.m.wikipedia.org/wiki/Ontario_Teachers%27_Pension_... the Ontario Teachers Pension Plan is probably one of the best examples of a well run pension fund. All public employees in Ontario, as well as federal employees are all part of a union, whether it be OMERS, PSAC, CUPE, caisse or otherwise. These unions protect the employees from the 4 year swings of governments and instead look after the long term health of employees.

I suggest you research the laws surrounding pensions in Canada. Answering the questions properly here is too lengthy, but they could probably be answered by 30 minutes of research. Pensions are incredibly powerful for looking after retirees. In fact, Canada has a federal pension plan called CPP which pays out to all Canadians based upon their contributions over their lifetime. Pensions are not the enemy my friend, it's elected representatives who look out for their short term interests instead of the health of their electorate.

Re: Chicago successfully taxes streaming services

#45

Post by Spivak »

Mirioron wrote: post #32
reaperducer wrote: post #12

Earlier quoted context omitted.

It's an entertainment tax. Netflix supplies entertainment to people in the city of Chicago, and so the city of Chicago taxes that entertainment. Same thing with concert tickets and other forms of entertainment.

And if every city and town has their own tax that's different in some way? Then what? Or alternatively, could Netflix ban all residents of Chicago?

1. Businesses have to incorporate the local tax code to any area they provide services in. Same as any brick-and-mortar business right now.

2. It becomes burdensome for businesses to comply so they ask the federal government to occupy the field and standardize.

I don't really know why people expect businesses that deliver their products digitally to be treated differently from everyone else.

Re: Chicago successfully taxes streaming services

#46

Post by closeparen »

Shivetya wrote: post #14

Chicago is in the hole for nearly thirty billion dollars. They have been floating the idea of a ten billion dollar bond with the debt structured in a way which lets current politicians escape the fallout from its payment and not having to raise property taxes. The state of Illinois is not well off either with debts estimated at the low of one hundred thirty billion to two hundred fifty billion. An Illinois proposal j…

$75k income, increasing at 1% a year, saving 15% each year, investing at 7% average returns over a 40 year career would give you $101k in retirement.

That doesn’t seem unreasonable.

Re: Chicago successfully taxes streaming services

#47

Post by stochastastic »

rrrrreeeee wrote: post #31
Shivetya wrote: post #14

Chicago is in the hole for nearly thirty billion dollars. They have been floating the idea of a ten billion dollar bond with the debt structured in a way which lets current politicians escape the fallout from its payment and not having to raise property taxes. The state of Illinois is not well off either with debts estimated at the low of one hundred thirty billion to two hundred fifty billion. An Illinois proposal j…

Do the employees and employers not pay into a separate fund that cannot be touched? I fail to see how it's the fault of the pensioners. It's absolutely archaic if the future taxpayers have to pay for a retirees pension. In Canada we have pension funds that are separately funded entities that are payed into over an employee's career.

In the US a “pension” typically means a fixed benefit regardless of investment performance. Many pension sponsors reduced contributions to their plans when markets were up and have had large shortfalls when markets have gone down, which has contributed to the “pension funding crisis”.

Re: Chicago successfully taxes streaming services

#48

Post by nitrogen »

reaperducer wrote: post #11
burlesona wrote: post #5

This stuff makes sense for cities, it’s just frustrating how much more difficult it makes it to operate a “mom and pop” software business. The complexity of potentially complying with hundreds of state and municipal governments - not where you are located but where online purchases originate - is a pretty significant deterrent to setting up a small side business. Imagine if every food truck had to pay taxes based not…

It was only recently added to SmugMug's processing. Having owned two businesses, I can say it's a lot more complicated than most people realize. Tax rates and reporting don't fit neatly into city, state, or even simple ZIP Code boundaries. Plus different products, even sold from the same food truck to use your example, can have different tax rates. The whole retail taxing system is a mess.

There are vendors that will calculate taxes for you, but the ones that do it right down to the address level charge a lot. Plus you are sending all of your customers' detailed purchase data to a third party.

Re: Chicago successfully taxes streaming services

#49

Post by phonon »

closeparen wrote: post #46
Shivetya wrote: post #14

Chicago is in the hole for nearly thirty billion dollars. They have been floating the idea of a ten billion dollar bond with the debt structured in a way which lets current politicians escape the fallout from its payment and not having to raise property taxes. The state of Illinois is not well off either with debts estimated at the low of one hundred thirty billion to two hundred fifty billion. An Illinois proposal j…

$75k income, increasing at 1% a year, saving 15% each year, investing at 7% average returns over a 40 year career would give you $101k in retirement. That doesn’t seem unreasonable.

Err, who earns $75k a year for 40 years?

40 years ago that person probably started off below $15k/year.

(In 1979 average household income was $19,553) https://www.multpl.com/us-average-income/table/by-year

Re: Chicago successfully taxes streaming services

#50

Post by rrrrreeeee »

stochastastic wrote: post #47
rrrrreeeee wrote: post #31

Earlier quoted context omitted.

Do the employees and employers not pay into a separate fund that cannot be touched? I fail to see how it's the fault of the pensioners. It's absolutely archaic if the future taxpayers have to pay for a retirees pension. In Canada we have pension funds that are separately funded entities that are payed into over an employee's career.

In the US a “pension” typically means a fixed benefit regardless of investment performance. Many pension sponsors reduced contributions to their plans when markets were up and have had large shortfalls when markets have gone down, which has contributed to the “pension funding crisis”.

In Canada, pensions contributions are never ever adjusted depending on market performance. Instead, payouts are typically indexed to inflation. When markets are down, funds usually have a shortfall, so they cut the inflation indexing. When markets are up and the pension fund is overfunded, they restore the inflation adjustment. This slightly harms the pensioners, but not by much to have a critical effect on their well-being.
Post reply on HN