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Progressive politicians lambaste businesses for charging so-called junk fees, even as they do the same to taxpayers. A case in point is the record $56 billion budget that Illinois Gov. JB Pritzker signed last week, which includes new taxes on digital advertising, social media, crypto and even on prediction markets.

Mr. Pritzker boasts that the budget increases spending on welfare programs, “all without raising taxes on working people.” How does he define “working people”? The broad-based digital taxes are sure to whack most of the state’s 12.7 million residents.

Start with a new progressive tax on social-media platforms that is levied based on their number of active monthly users in the state. The murky legislative language could sweep in Yelp, Nextdoor and Substack. Platforms with at least one million users would pay a top marginal rate of $6 a year per Illinois user, while smaller platforms would pay $1.20 for each user.

The tax will encourage companies to put more services behind paywalls, reduce creator monetization opportunities and raise prices on in-state advertising. “It turns the internet into more of a ‘walled garden,’ since free accounts become increasingly costly to provide,” the Tax Foundation says. Illinois residents will pay the tax one way or another.

The budget also includes a new 10% gross receipts tax on providers of targeted digital ads in the state. The tax is aimed at the likes of Google, Meta and TikTok, but it will invariably be passed along to businesses that buy ads. Think the mom-and-pop taqueria, bike shop or dry cleaner.

A similar tax in Maryland is mired in litigation. The federal Internet Tax Freedom Act prohibits state and local governments from imposing discriminatory taxes on digital commerce. The Illinois tax, like its Maryland cousin, appears to violate the federal law because it doesn’t extend to other types of advertising.

The state is also imposing a first-of-its-kind 0.2% tax on digital asset transfers in the state. Sell $10,000 in Bitcoin, and you will owe $20. Expect the tax rate to grow as Democrats scrounge for more revenue. Ditto a new 1.75% tax on sports bets made on prediction markets, and a 15% tax on receipts of fantasy sports operators.

Democrats in Springfield like these digital taxes because they apply to activity that is less mobile than income or corporate taxes. They also figure that most voters won’t notice since they will occur on transactions mediated by business. But they tell you what Mr. Pritzker’s priorities are as he prepares to argue that Illinois policies are right for the entire country.

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