Audit Notes: Newspapers v. Postal Service, student debt, taxes

The newspaper industry’s situation is already apocalyptic, but the Associated Press reports it could be about to get worse.

The AP says that a possible postal-service deal with a junk-mail advertiser has the newspaper industry up in arms. Newspapers say it could cost them a billion dollars a year.

The NAA’s estimate for $1 billion in revenue losses is based on its survey of half its 806 member newspapers, including companies such as The New York Times Co., The McClatchy Co. and Gannett Co. Inc. Newspapers estimate that more than a third of the $2.5 billion in annual ad revenue they get from retailers of durable and semi-durable goods such as clothes, furniture and appliances could be siphoned off by a lower-cost alternative…

The Washington Post says it could lose about 12 percent of its annual print advertising revenue if the post office’s plan gets approved. Last year, the Post’s print ad revenue was $264.5 million.

This one’s worth watching.

— My friend Moe Tkacik digs into the archives to report on how we used to think about student debt, digging up 1970s-era congressional testimony that making the loans undischargeable in bankruptcy was unconstitutional and reporting the nugget that even the American Bankers Association formally lobbied against it.

But this law was furthered by bad press coverage. The obviously bogus PR plants like this LAT report would be comical if their effects hadn’t been so awful:

A typical syndicated dispatch on the surge in student deadbeats was the August 27, 1972 expose of Los Angeles Times reporter Linda Mathews, which began with the personal anecdote of an anonymous “Washington banker” who purported to have once “handed a $1500 check” for the year’s tuition to a nameless “18-year-old college freshman” only to be insouciantly told, “Oh, I never intend to repay this loan.” The kid was merely acting on the advice of “underground newspapers,” the anonymous banker—who had since joined “the staff of the American Banking[sic]Association”—helpfully explained.

Elitist cheaters” and “professional deadbeats” had driven default rates “as high as 40 percent in some cases,” the Chicago Tribune fumed. “Sometimes when I see someone come out before me with a job and no other debt but a college loan—and not even a big one at that—I feel like saying, ‘Why you little stinker,’” a judge told the New York Times. A Wall Street Journal editorial on “the educational subculture” blamed the “crisis” on “an attitude of unconcern—that default really isn’t like ripping off anybody, just the large, impersonal government that wastes plenty of money on other things” that was apparently pervasive throughout the entire education profession.

— SmartMoney reports that “‘Taxamageddon’ May Wallop Home Sellers” and says, “The tax bill from selling a home could jump more than 50% next year for some sellers.”

Which sellers? Those married couples who have more than half a million dollars of capital gains in their homes or singles who have a quarter-million bucks.

That doesn’t mean you get hit by capital gains taxes if you sell your house for $500,000. You only get taxed if you sell your house for $500,000 more than what you paid for it. Suffice it to say, very few people will pay these taxes.

I’d guess most of the kind of people who do probably rely on their tax attorneys rather than SmartMoney to keep an eye on this kind of thing.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.