Federal Government Considering “iPad Tax” To Subsidize Journalism

Customers Queue As Apple Launch The iPad In The UK

The big lie, of course, being that journalism needs to be saved. I’d argue that, even as traditional forms of news like newspapers and news magazines die off, Americans are perhaps more informed of the day to day soap opera that is politics now than ever before. Consider the spectacle of members of Congress trying to calm angry town hall crowds last summer by making claims about the health care bill that were quickly rebuffed by their constituents who were reading from actual copies of the bill.

That happened because, thanks to the internet, there’s more information available to the public in a more accessible format than ever before.

Journalism’s problem is a) an archaic business model and b) an pervasive, overwhelming liberal bias. But it seems as though the federal government wants to preserve both the archaic business model and the pervasive bias.

Per James Pethokoukis, the FTC is recommending that Big Media be bailed out in the following ways:

– Establish a “journalism” division of AmeriCorps.

– Increase funding for the Corporation for Public Broadcasting.

– Establish a National Fund for Local News.

– Provide a tax credit to news organizations for every journalist they employ.

– Establish Citizenship News Vouchers (lets you direct money from tax return).

And how will they pay for all this? From the FTC’s “discussion draft” on the matter:

Tax on broadcast spectrum. They argue “commercial radio and television broadcasters are given monopoly rights to extremely lucrative spectrum at no charge,” and this is a massive public subsidy. They therefore suggest the revenues generated by that spectrum be taxed at a rate of 7 percent, which should result in a fund of between $3 and $6 billion. In exchange, commercial broadcasters would be relieved of any obligations to engage in “public-interest programming,” which the broadcasters claim costs them $10 billion annually.

Tax on consumer electronics. A 5 percent tax on consumer electronics would generate approximately $4 billion annually.

Spectrum auction tax. They suggest there be a tax on the auction sales prices for commercial communication spectrum, with the proceeds going to the public-media fund.

Advertising taxes. They note a considerable amount of our broadcast spectrum has been turned over to disseminating commercial advertisements, and a 2 percent sales tax on advertising would generate approximately $5 to $6 billion annually. In addition, they suggest that changing the tax write-off of all advertising as a business expense in a single year to a write-off over a 5-year period would generate an additional $2 billion per year.

ISP-cell phone tax. They suggest consumers could pay a small tax on their monthly ISP-cell phone bills to fund content they access on their digital services. A tax of 3 percent on the monthly fees would generate $6 billion annually. They note, however, this is the least desirable approach because demand for these services is “elastic” and even a slight rise in price could result in people dropping the service.

So we’re going to take more out of our already beleaguered economy to prop up the old way of doing media.

Which is stupid. Because why should we prop up the media status quo? Letting the old media die frees up capital which can then be deployed to new, better ways of doing journalism. It’s called creative destruction, and it’s how free markets work.

What’s more, do we really want a media establishment that is dependent on government funding? How can we be said to have a free and independent press when that press is in the thrall of government dependency? This is a horrible idea.

The media world is changing. The government needs to stay out of the way and let those changes happen.

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Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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