Lowdown on download taxes? They hurt artists, labels and students

One old cliche resonates in the tax-happy bureaucracy of Chicago, where I live: "If they could, they'd tax the air we breathe."

This past week, though, the Illinois state legislature almost joined 19 other states in one-upping that hoary aphorism: They almost instituted a tax on honesty.

On Thursday, Illinois Gov. Pat Quinn backed off a proposed plan to impose a state sales tax on digital downloads of music and movies, which would've made Illinois the 20th American state to institute such a plan. The new levies--quoted at around $0.50 per $9.99 album and $0.75 per $14.99 movie--provoked criticism and made headlines on Wednesday, including front-page coverage from the Chicago Sun-Times, which dubbed them "iTaxes."

Since 2007, 19 states have enacted such download taxes, including Indiana, Wisconsin, Kentucky, Mississippi, Nebraska, New Jersey, South Dakota, Tennessee, Utah and Washington, according to the Sun-Times. And one can only wonder whether lawmakers are using the revenue as efficiently as college students who might save all month long for a single mini download spree. Doubtful.