“Government! Three fourths parasitic and the
other fourth Stupid fumbling.”
― Robert A. Heinlein
(New York Times) - Dozens of California cities looking to shore up revenues are flirting with a new idea — tax your “Gilmore Girls” binge.
Pasadena was among the first to say publicly this fall that it wanted to tax video streaming services like Netflix, a step that could make up for lost tax revenue from growing numbers of cord-cutters.
At 9.4 percent, the so-called Netflix tax would treat streaming services as a traditional utility, the city said. If you use multiple services — for example, Hulu, Amazon Video and HBO — it would be added to each bill.
The move in Pasadena, with a population of about 140,000, has drawn consternation from technology companies and consumers who worry that it could be copied across the state.
“Websites and apps are not utilities and it defies logic to tax them like electricity, water or gas,” said Noah Theran, spokesman for the Internet Association, a trade group.
No California city has yet to begin collecting the tax. But roughly 40 cities, among them Glendale, Santa Barbara, Stockton and Sacramento, have gotten guidance from municipal consultants on how they might.
One question officials would need to resolve is where to stop, analysts say. If streaming video is taxable, then what about music, podcasts or video games?
“It opens a big Pandora’s box,” said Paul Verna, an analyst at eMarketer, a technology research company.
Mr. Verna said many of the streaming video tax proposals in California have bubbled up under the radar. If there is to be a larger debate, it will erupt when people start seeing their bills, he said.
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