I was thinking about something along the same lines. The only way the economy (GDP?) suffers is if the money doesn't circulate. Assuming *some* of those downloaded songs would have been purchased, as long as the money that would have been spent is spent elsewhere or invested (so basically not burned with a flamethrower), it's going to count toward GDP and its going to be taxed. The only possible losers are those who would have profited had it been spent on their CDs instead.