This will push more people off of their couches and into the streets so that the cops can shake them down for more of the ‘1 BILLION Dollar’ (said like Dr Evil said 1 million) shortfall.

Dear Nero,

Your taxation of the games has made the poorer Romans, of which there are a majority, very upset. They are no longer distracted from the real problems of Rome and are looking at you. I recommend lifting the tax, more games and more bread.

-your friend, Cicero.

PS. How’s mum?

“Use Taxes” are generally uncollectable in practice, save on certain large purchases such as automobiles. Most consumers do not even maintain the accounting information necessary to compute such taxes on the ordinary run of small purchases. Amazon, at least, is profoundly unhelpful about providing consolidated information. If you cannot provide the man in the street with something like a Form 1099, you cannot expect him to pay tax on something. I do not know whether Netflix has nexus in Chicago, or might want to acquire nexus. Netflix would presumably like to install cache-servers in telco switch-rooms if it can do so on a net-neutral basis. Netflix has historically had arrangements to pick up physical disks at main post offices, repack them, and send them out again. On inquiry, I find that Chicago’s general rate of sales tax is only one-and-a-half percent, in addition to the state of Illinois’ six-and-a-half percent. A nine-percent rate, admittedly on items exempted from state sales tax, would therefore be constitutionally suspect, levied on a class of purchases which are, by their nature, out-of-state, and therefore an unlawful import tax or tariff.

In practice, it seems to be difficult to spend large sums of money on the internet. Markets are too efficient, and publicly disclosed prices reflect this. The market price for movies and music is going to be set by services like Amazon Prime. Television is artificially inflated because cable-providers resist selling internet access without television. As I see it, it is only a matter of time before the Venezuelans start broadcasting television from space (*), in sublime indifference to American copyrights. At that point, Netflix will probably go bankrupt like the various music services, unable to span the gap between the competing expectations of consumers and movie studios. The eventual tendency of the internet is to become free. Real money tends to involve much more inherently local goods and services such as food.

(*) Broadcasting satellites are becoming cheaper than even the most minimal kind of navy or air force, considered as a means of projecting “national presence.”

Chicago’s basic problem is that the vast majority of greater Chicago’s population lives in the suburbs, or even in other states, and cannot be effectively taxed. Like every other big city, Chicago has vast tracts of derelict land, populated by street gangs. That isn’t going to be addressed by an internet sales tax. Chicago’s principal product is poverty, and that isn’t something you can sell on the market.

This is also happening in Australia to help Rupert Murdoch’s local pay TV empire defeat the new competition from those that supply content over the internet. Murdoch wasn’t happy in just neutering the National Broadband Network’s fibre to the home by supporting the current LNP Federal government’s already obsolete fibre to the node & corroded copper for the final mile thereby restricting the broadband speeds to less than 25Mb/s.
So now we have a great big new tax on the future, thanks Anthony John Abbott, or Captain Clownshoes as our ‘Dubya’ clone is known.