Media Taxes Worthy Of Protest
posted at 2:37 pm on April 15, 2010 by Danny Glover
As Americans across the country rally today against heavy tax burdens and the prospect of more, it’s a good time to tell them about the hit they will feel in their pocketbooks if media “reformers” convince the government it needs to “save journalism.”
Robert McChesney and John Nichols of Free Press outlined a four-part tax plan in their book “The Death and Life of American Journalism.” Their call for government-subsidized journalism would be funded by:
- A 5 percent tax on all consumer electronic devices;
- A 3 percent monthly tax on Internet and mobile telephone services;
- A 2 percent sales taxes on advertising;
- And a 7 percent tax on broadcasters.
All told, McChesney and Nichols expect the plan to raise $18 billion to $21 billion. The proposals that would hit taxpayers directly, taxes on electronic devices and communications services, would generate $10 billion of that pot.
The bottom line alone is reason enough for outrage, but what about the unintended consequences, which are inevitable when government intervenes in any market? Adam Thierer and Berin Szoka of the Progress and Freedom Foundation spelled those out in the first installment of a series titled “The Wrong Way To Reinvent Media.” (The third report, on media vouchers, was published today, and the second report covered broadcast spectrum fees.)
Here are two of their insights:
- [A] tax imposed at the point of purchase would discourage users from buying new devices. This, in turn would slow adoption of new technologies and retard innovation in a market that has seen consumers move increasingly towards replacing their old devices every few years.
- Increased taxes on broadband bills might discourage some broadband providers from rolling out innovative new services as rapidly as planned. And once the new service tax is passed along to consumers — as all business taxes inevitably are — they might be less likely to adopt broadband, or might even cancel existing service.
The authors also examined the payout side of the subsidy equation — in other words, who would get the money? “Would blogs qualify?” they asked. “What about live reporting via Twitter or photo journalism via Flickr? Who gets to decide what qualifies as news worth subsidizing, as opposed to mere opinions or aggregation?”
Add it all up, and you have a nightmare scenario for taxpayers — a heavier tax burden, a less innovative culture and government as the information overlord. That’s worthy of a protest.
[Cross-posted at Digital Society, where the author serves as editorial director]