Click here to return to the main News and Events page

FTC Chairman: Tax on CE is ‘Terrible Idea’
It looks like the Federal Trade Commission won’t subsidize newspapers by taxing technology after all.

They must have read my memo (followed by CEA chief Gary Shapiro’s plea in the Huffington Post).

In a ridiculous proposal to bail out journalism, the FTC had considered a 5% tax on consumer electronics, which could raise about $4 billion per year. (CLARIFICATION: The proposal was not created by the FTC, just considered by the commission.)

The money would be used to subsidize poorly run news outlets suffering the “challenges … of the Internet age.”

That idea, as well as other silly schemes to guide journalism “through a significant transition in which business models are crumbling” are spelled out in a 47-page FTC document called “Potential Policy Recommendations to Support the Reinvention of Journalism (pdf).”

In a hearing yesterday, however, FTC chairman Jonathan Leibowitz said a CE tax was a dumb idea:

Recently, we released a Discussion Draft with a number of proposals. Some of these may not be advisable policy recommendations – for instance, it would be a terrible idea to tax electronic equipment to subsidize newspapers. We are examining these issues and will be holding a roundtable next week and issue a report in the fall.

The comment was merely an aside to a question about newspapers and antitrust, during yesterday’s meeting of the Subcommittee on Antitrust, Competition Policy and Consumer Rights of the Senate Judiciary Committee. The hearing was entitled “Oversight of the Enforcement of the Antitrust Laws.”

About those other taxes ...

The tax on CE is only one recommendation studied by the FTC to save journalism from the evils of the Internet.

The group also is pondering a 2% sales tax on advertising, as well as new accounting rules that would further punish advertisers ... and, ironically, the journalists they help to employ.

And then there's the "small" 3% tax on cell phone bills "to fund content they [consumers] access on their digital services." And that's supposed to help "reinvent" journalism ... how?

What do you say to that, Chairman Leibowitz?

UPDATE
In an email to CE Pro, FTC spokesman Peter Kaplan explains: "The recommendation for a 5% tax on CE was "an idea submitted to the FTC's staff as part of workshops we've been holding since last year. It was never FTC's proposal or recommendation ...."

read full article