Chicago’s Tax on Free Social Media Usage Is a Bad Idea

Beginning this year, Chicago requires social media companies to pay a $0.50 a month tax for every user in the city, with the revenue earmarked for mental health programs. Framed as a “social media amusement tax,” the policy shifts the financial responsibility for this new social service onto major tech firms like Meta, Alphabet, and X — linking them to broader concerns about the impact of their platforms on users’ well-being.

NetChoice, a trade association of internet businesses, is challenging the ordinance in court. Their argument is straightforward: Platforms that function as modern communication infrastructure shouldn’t be singled out for special taxes tied to how many people use them.

Whether you prefer Fox News, Bluesky, or something in between, all Americans should be allowed to choose their preferred channel without incurring government fees or penalties. A “social media tax” threatens to make these relatively seamless platforms become bogged down with ad spams or even limited by a membership fee.

As Paul Taske, co-director of NetChoice’s litigation center, explains, “Chicago’s social media tax is a penalty on popular speech. Minnesota tried a similar tax on large newspapers back in the day. That failed. Chicago’s will fare no better.” The 1970s Minnesota tax on paper and ink products consumed in the production of regular publications was, indeed, deemed unconstitutional in the 1983 Supreme Court case Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue.

In the internet era, platforms like Facebook or Instagram are the new Minneapolis Star & Tribune, and going after them follows the same failed logic of paper and ink tax. After all, “online ads are some of the cheapest, most effective means of reaching an interested audience,” Taske said. “By adding new costs to those services, Chicago’s small businesses will be worse off, and users will either receive less relevant material or be flooded with additional ads to cover the cost of continued operation in Chicago.”

At a basic level, the dispute comes down to what Chicago is actually taxing. The city says it’s just raising revenue for mental health programs, but it’s effectively putting a price on participation in the digital spaces where much of modern public conversation now happens.

Courts have increasingly had to wrestle with how old legal ideas apply to new platforms, especially as social media has become central to how people communicate. This case is part of that broader shift. The underlying issue of government interference with public communications is simple enough without legal jargon.

Chicago’s goal — supporting mental health — is well intentioned. The problem is that taxing social media companies doesn’t address why people struggle with mental health. To meaningfully address this issue, the city needs to directly connect with why people struggle with mental health — not punish social media users.

In an era where so much of public life happens online, policymakers should be cautious about any measure that makes digital participation more expensive or less accessible, even indirectly. This ordinance sets a bad precedent that digital communication tools can be taxed based on how widely they are used.

The same logic could spread easily to messaging apps, search engines, streaming platforms, or email services, turning everyday access to communication and information into a patchwork of local fees and restrictions. This taxation structure would weaken the internet’s role as a shared, open space for information and connection.

Chicago is free to seek policy approaches supporting mental health, but this is the wrong mechanism to do so. If policymakers want durable progress, they shouldn’t place new, unconstitutional costs on the basic infrastructure of the modern digital world.

Sam Raus is the David Boaz Resident Writing Fellow at Young Voices. Follow him on X: @SamRaus1.