Will Washington bail out the MSM with an iPad tax?
This is actually quite astonishing. A “staff discussion draft” from the Federal Trade Commission recommends ways the government can save journalism. First, it lists a number of ways Washington can subsidize the media (to the tune of $35 billion a year):
– 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 here is where the money would come from, which I will quote directly:
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.
Me: In this must-read NYPost article, Jeff Jarvis calls the electronics tax an “iPad tax.” Besides of all the issues this raises concerning government influencing the media, I find it hard to believe voters would be willing to subsidize a broken business model.