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Uncle Sam: 5% Tax on CE Products Could Save Journalism
Good news for me, right?
Not so fast. To save journalism, Uncle Sam may punish money-grubbing consumer electronics companies – the very CE companies that pay our bills here at EH Publishing.
The FTC is
It’s only fair, right? Profiteers who make TVs, cheap computers and smart phones should be punished for turning reporters and readers into slugs.
Such is the wisdom of the FTC, author of a 47-page document called “Potential Policy Recommendations to Support the Reinvention of Journalism (pdf).” (CORRECTION: While the FTC authored the document, the commission did not propose all of the ideas, including the CE tax, contained therein.)
Here’s how government segues from bad journalism to CE sales tax (stay with me):
Studies show that newspapers provide the largest quantity of original news. >> Advertising is down >> Newspapers respond by cutting staff. >> Staff downsizing causes “significant losses of news coverage.” >> Newspapers struggle to find a sustainable business model “and there is reason for concern that such a business model may not emerge.” >> U.S. Government has always subsidized journalism in one way or another. >> Tax consumer electronics.
The FTC document refers to a “Citizen Media Fund” that could be financed through:
Tax on consumer electronics. A 5 percent tax on consumer electronics would generate approximately $4 billion annually.
Advertising taxes. …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 … 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. … 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.
Such a Dilemma
Sadly, I have yet to avail myself of any “stimulus” funds so generously distributed (from my own pocketbook) to countless Americans suffering from old cars, inefficient windows, poor housing decisions, outdated business practices and insufficient fish supplies in area lakes.
But the FTC’s silly
We can only hope that the FTC itself will use any new funds to hire some of the reporters that will no doubt be displaced by a new tax on advertising.
The government agency could use a little help editing such sections as this:
Some experts see an opportunity for news organizations to think creatively about the optimal organizational design(s) for news entities in the future and then to seek legislative changes as needed to implement that design. For example, some news entities may wish to explore hybrid organizational structures that integrate the pursuit of social purposes with business activities. ... These hybrid designs may make sense for news entities, because journalism can fit a “social purpose” paradigm – that is, good journalism improves social welfare by educating the public through truthful and insightful reporting.
UPDATE
In an email to CE Pro, FTC spokesman Peter Kaplan explains: "The recommendation for a 5% tax on CE was "an idea submitted to the FTC's staff as part of workshops we've been holding since last year. It was never FTC's proposal or recommendation ...."
Read the entire note.
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9 Comments (displayed in order by date/time)
The political motivation of this is obvious and appalling. Failing newspapers and magazines are now popularly dubbed the “lamestream” media for a reason: along with a series of bad business decisions (eliminating local editions, etc.) their own bias and agenda have driven a wedge between them and their readership, resulting in lost subscribers and fewer sales.
That the current regime in Washington is intent on subsidizing them is hardly surprising. Maybe they should concentrate on reforming public broadcasting instead of putting bad newspapers on life support.
They’ve already had practice with GE and MSNBC Mark.
well said Gary Shapiro, +1
Julie
You’re correct. It won’t be good for me either. Ultimately this line of thinking (or lack of thinking) won’t be good for anyone. Our Founding Fathers understood the issue.
And Mr. Shapiro you may also be correct; they may not understand the voters. On the other hand it’s possible that Washington, and the thugs in places such as Sacramento, and other state capitals, do understand. The thieves are just stealing as much as they can while they can.
It is simply the ethics of stealing by those who know better than “We the Peasants”.
If we choose not to take loose change from our pockets to buy a newspaper, then the Master Allocators of Washington DC will force us do it for our own good.
They take from the Rich (or anyone still employed—- wait, they also tax unemployment checks), then give to the Poor (anyone who is privileged to know them), and take a “little” for themselves to cover the price of their redistribution service. I’ve been told that the Mafia can do it for less.
Julie,
I would like to encourage all CE professionals to join your local Tea Party. The simple idea of taxing an on going successful business model to support a failing business model is nothing more than institutional taxation without true representation. Please locate, support, and participate in your local Tea Party.
@all of the above,
Well put - there is no question that those in power absolutely “don’t get it” and have no concept of serving their constituents (except, possibly, in the context of the old Twilight Zone episode “To Serve Man”). Not only did our founding fathers NOT structure career politicians into their new form of government, some of them actually warned us against allowing this form of tyranny to develop. Politicians, like diapers, need to be changed often and for exactly the same reason.
Here is a similar case: a proposed tax on broadcasters.
“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.”
Check out this link for the full story.
http://www.coyoteblog.com/coyote_blog/2010/06/homesteaders-beware.html
Enjoyed this article immensely! Keep posting articles like this - really enjoyed it and the rest of your site Your article was very interesting. Thank You. Thank you for the wonderful article.
Welcome to my world where the inmates are running the asylum.
Proof that Washington does not understand why voters are angry.
A century ago they would have proposed taxing cars to save horses. Should have taxed television to save radio.
Technology and innovation do challenge the status quo and more people are writing and creating than ever before - thanks to our technologies! With all respect to the established journalists and media they have botched many major stories from the lack of WMD to the sub prime mortgage mess to the health care debate to the recent skirmish in Israel. Taxing products to preserve select journalists or even print media is inane and for the FTC to publish this is insulting to the intelligence of the American public.