Tax on Consumer Electronics Could Help Bail Out Newspapers

As preposterous as it sounds, you, the consumer, could be tasked with bailing out the newspaper business by way of a tax implemented on electronic devices.

A Federal Trade Commission (FTC) look into “Potential Policy Recommendations to Support the Reinvention of Journalism” (PDF, thanks Kotaku) addresses the “challenges faced by journalism in the Internet age.” Noting that “The news is a ‘public good’ in economic terms,” the report adds that “it is often difficult to ensure that producers of public goods are appropriately compensated.”

In addition to proposals that include providing a form of “hot news protection,” introducing an “industry-wide licensing agreement,” debuting a content license fee of $5 to $7 to be paid by an Internet Service Provider for every one of its accounts, and providing tax credits to news organizations, another suggestion recommended the formation of a “Citizenship Media Fund” by the government.

Such a fund could have its coffers filled by a tax on consumer electronics.  “A 5 percent tax on consumer electronics would generate approximately $4 billion annually.”

Another suggested way to fill the fund would be to introduce a tax on the broadcast spectrum, which would free commercial broadcasters from obligations to provide public-interest programming.

The FTC does note that all the proposals put forward are merely that, just proposals. These matters will be discussed in a roundtable meeting held later this month.

Somewhere, Rupert Murdoch just might be smiling.

Update: Entertainment Consumers Association (ECA) VP and General Counsel Jennifer Mercurio offered this take on the proposals, "Taxing online goods serves to chill commerce at exactly the time we need to encourage shopping. It’s anti-consumer, bad for economic growth and bad public policy."

Disclosure: GamePolitics is a publication of the ECA.

Thanks PHX Corp!

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