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FTC Suggests Tax on Consumer Electronics to "Reinvent Journalism"

| 4 Jun 2010 16:38
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As newspapers and other forms of old media continue to struggle in the digital age, the Federal Trade Commission has suggested that a new five percent tax be applied to consumer electronics in order to subsidize the "reinvention of journalism."

The suggestion is part of an FTC discussion draft on "Potential Policy Recommendations to Support the Reinvention of Journalism" and, for the record, not something that's currently being considered for implementation. The paper is "solely for the purposes of discussions" and includes numerous proposals for adapting to the rapidly-changing face of journalism.

Print media revenues have crashed over the past decade as online news has become increasingly prevalent, yet in the case of newspapers, revenues from online components still account for only a small amount of total income. According to the report, "it appears unlikely that online advertising revenues will ever be sufficient to replace the print advertising revenues that newspapers previously received." One possible solution is increased government funding, but of course all that money has to come from somewhere. Where, you ask?

From you, of course! "Spectrum auction" and advertising taxes would target businesses, but consumers are also being eyeballed: A five percent tax on consumer electronics would generate $4 billion annually, while a proposed "ISP-cell phone tax" that would charge "a small tax on their monthly ISP-cell phone bills to fund content they access on their digital service," suggested in the range of three percent, would add up to $6 billion each year.

The total cost of the proposed subsidies could run as high as $35 billion annually, a hefty chunk of change in today's economy. "Although [the proposal's authors] recognize that convincing the government to allocate this amount of money to journalism and the news media would be extremely difficult, they argue 'this level of spending would be similar to the U.S. government's commitment to subsidizing journalism in the first half of the 19th century,' and the government should be willing to allocate funds to journalism as a public good," the report says.

What exactly would constitute "consumer electronics" isn't specified but it's a safe bet that whatever it is you're reading this on would qualify. So would your 360, your PS3, the hi-def LCD you've got them hooked to, your iPod, iPad, iPhone and all sorts of other little twiddydinkes we've all come to take for granted in our daily lives. The idea of propping up "dead tree media," to borrow a phrase, with yet another tax on new technologies is foolish and futile, but the examination of the future of journalism is definitely worthwhile. The report is a bit thick in places but provides an interesting perspective on what could become a very sticky issue in the future. Give it a read (and then give it some thought) at ftc.gov. (PDF format)

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