I recently wrote an extensive analysis and criticism of a proposed California link tax, offering many alternatives. A state senator just proposed his own alternative — and it is even worse.
Sen. Steve Glazer’s SB1327 would tax the collection of data for advertising by large platforms — onlyl those earning more than $2.5 billion in ad revenue — to support a job credit for local news organizations. Glazer calls this a “data extraction mitigation fee,” analogizing the collection of data to chemical companies polluting the land. Oh, please.
I have many problems with this:
- Data are information and information is knowledge. To demonize and tax the collection of information should be abhorrent in an enlightened society. His rhetoric at moral-panic pitch sets a perilous precedent.
- He argues that he is taxing a barter exchange users make when they give data to internet platforms and receive free content in return. Well then, shouldn’t that tax apply to the exchange we all make when we give our valuable attention to TV and radio and much of the web in exchange for free content? But the bill exempts news media.
- The bill offers a tax credit of 25–50% of the salaries of full-time journalists. As I said in my paper analyzing the prior legislation, the California Journalism Preservation Act (CJPA), this disadantages much of Black, Latino, community, and start-up media that cannot afford full-time staff and rely on freelancers. The bill earmarks funds for ethnic media but supports larger incumbents over small and new competitors.
- The hedge funds that now own 18 of the state’s top 25 newspapers — the hedge funds that are ruining journalism in California and across America — will benefit. They should not receive a penny. If anyone’s cash flow should be taxed, if anyone should be punished for the state of news today, it is them. Though the money is intended to go to supporting reporters, money is fungible and it will doubtless support hedge funds’ bottom lines more than journalists.
- I remain disappointed to see journalists standing with legislators to lobby for and support legislation for their benefit and to use editorial space to promote it in a clear conflict of interest. Journalists should not be seeking favors from those in power whom we should be covering independently.
- In his presentation of the bill, Glazer in one breath notes the growth of revenue for California’s own platforms and the decline of revenue for the legacy news indusry and says “the correlation is unmistakable.” In a next breath he goes farther, saying that “the fee in my bill assigns the cost of reviving local journalism to those firms whose data extraction and economic activity is causing the news industry’s decline.” (My emphasis)
I’ve spent 50 years in journalism and I can testify that much of the injury to the legacy news industry is self-inflicted. It is unproductive to try to pin entire blame and responsibility for the health of a state’s news and information ecosystem on one industry and a few companies in it. Under this logic, as I say in my paper, A&P (if it still lived) would owe reparations to every corner grocery, and solar- and wind-power providers should subsidize coal mines.
I have long been on record saying that I am concerned about government intervention in speech and especially journalism. Glazer says his formula for journalist employment tax credits doesn’t interfere because it gives the credit “to all qualifying news organizations.” But for government to decide what news organizations qualify is itself a thumb on a scale.
If government wishes to subsidize news, I will ask again whether there are better alternatives. In my paper, one of many that I discuss is the New Jersey Civic Information Consortium. It receives state as well as private funding and solicits grants for news entities and projects. Its board, which is appointed by state universities, the governor, and the legislature, makes independent judgments about what to support according to its goals. It is housed at Montclair State University’s Center for Cooperative Media (where — disclosure — I am on an advisory board).
If I were to get over my objections to government involvment in journalism and, for the sake of discussion, endorse use of government funds to support news, then I would at least want to find an alternative that was not based on punishing one behavior, one industry, or one set of companies. If news matters to everyone in the state, shouldn’t everyone in the state take a measure of responsibility for it?
Here’s one promising idea. What if a state’s — for example, New Jersey’s — existing library funding were expanded to also support the news information ecosystem — and, importantly, to recognize the role that libraries (in towns, colleges, and schools) already play in supporting local information. The funding for news could be distributed by the NJ Civic Information Consortium, which could also encourage more collaboration among libraries and news organizations — another benefit. Rather than supporting only incumbents, it would also support new competition and innovation and serving communities ill-served in the past.
Thus far, the debate over government support of news media has been driven by lobbyists for news media. In an op-ed of mine just published by Editor & Publisher (a trade publication that, I’m grateful to say, encourages such debate), I track the history of the newspaper industry opposing new technologies and competitors, cashing in political capital earned through their journalism to attack those competitors — radio a century ago, then TV, then telcos, now internet platforms — and seek political favors of protectionism and subsidy. I wish we could break free from this cycle of self-interested good-guy/bad-guy myth-making and instead have a mature, responsible, productive, and open discussion about society’s priorities and how to support them.
I believe that rebuilding news — not legacy news companies and not their investors, but news — should be a high priority. I hope to find ways to support it. I wish that this agenda would not be set by hedge funds’ lobbyists but instead by the communities and institutions affected.
California’s latest bill does not do that. It supports incumbents over innovators. It demonizes not just internet companies (odd, given that California benefits tremendously from their presence, employment, and taxation) but worse, the collection of data — ultimately, of learning. California can do better. (And if it doesn’t, New Jersey could show the way.)
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