Another interesting—and quite radical—idea for how government could support the press comes from Dean Baker, the co-director and co-founder of the Center for Economic and Policy Research, a nonpartisan think tank in Washington. He proposes a tax-credit system in which every citizen would be allowed a $100 donation to any creative outlet, including journalism. Creative organizations, such as museums and symphonies as well as media outlets, could register for eligibility to receive those donations on the condition that they forgo copyright. Such a tax credit would provide a funding mechanism for creative pursuits, particularly beneficial to start-ups, small organizations, and individuals. And taxpayers would reap an obvious reward: anything funded by the system would be available at zero cost.
Baker’s tax-credit system—or any direct subsidy, for that matter—is unlikely to be politically popular or even logistically feasible in the U.S. Part of the problem is that the First Amendment forbids Congress from “abridging the freedom of the press.” As such, direct subsidies targeted to specific press outlets might be construed as an abridgement on the freedom of those that don’t qualify for them. Free Press’s trust model is also likely to encounter substantial opposition because of its proposal to tax advertising revenue. According to Picard, an advertising tax would be nearly impossible to get through Congress. However, it’s worth noting that tax incentives are already used in a variety of industries, such as agriculture and manufacturing, and that they might also represent the best way to address the problems the press currently faces since they could be designed to promote specific general outcomes, such as hiring more reporters and editors or opening new bureaus.
Tax incentives could also be useful in promoting less commercial models of news-media ownership. The tax on the profit from the sale of news organizations could be eliminated or reduced when they are sold to a nonprofit, a foundation, or a small, media-only company—three models that are sheltered from market pressures either because they are dedicated to the mission of journalism or do not have to answer to shareholders. A reduction or exemption from the estate tax for family-owned newspapers could also encourage this longstanding and generally successful ownership model. At a 2004 symposium, “News in the Public Interest: A Free and Subsidized Press,” Frank Blethen, the publisher of the family-owned Seattle Times, suggested a tax plan to encourage family ownership that involved eliminating the estate tax and instituting a capital-gains penalty for selling the publication, among other things.
Picard also suggests one-time subsidies for research and development of media technologies. With the historical precedents of the telegraph and the Internet, government funding for the development of electronic paper—portable, refreshable, and paper-like display mediums that are said to be in development—would drastically reduce the enormous production costs of newspapers, would be politically feasible, and could be secured from existing government agencies like the National Science Foundation. “More than half of newspaper costs are distribution and production,” says Picard. “And another twenty-five percent is the administration of these functions.” If the government were to subsidize the development of electronic paper, Picard argues, it could then give it away to press outlets, much like it gives away public airwaves to network television stations. In turn, newspapers could distribute electronic paper to consumers as part of their subscription.
To survive, journalism and journalists need to let go of their aversion to Uncle Sam. “The founders never held the view that if rich guys can’t make money off journalism, then we just won’t have journalism,” says Robert McChesney. “The nation was built on the idea that we have to put into place policies that guarantee journalism no matter what.” As Overholser puts it, “There are clearly roles that the government’s going to play, and I think we need to be smart about how we stand up to the ones we don’t want them to play and also how we can think creatively about constructive roles.”