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To Save Independent Journalism, 'Ambitious' Proposal Urges Tax on Tech Giants That Helped Destroy News Industry

"Think of it like a carbon tax... The United States should impose a similar mechanism on targeted advertising to counteract how the platforms undermine journalism and amplify content that's polluting our civic discourse."

A pair of press freedom advocates have proposed creating a federal endowment for local journalism funded by a new tax on social networks' targeted online advertising. (Photo: Chesnot/Getty Images)

To combat a media industry funding "crisis" that is killing off local, independent journalism, a new report released Tuesday by the advocacy group Free Press puts forth "an ambitious but achievable proposal"—calling on federal lawmakers to create a Public Interest Media Endowment that would be funded through a small tax on targeted online advertising sold by tech giants like Facebook, Google, and Twitter.

"Putting the fate of U.S. journalism in the hands of Silicon Valley billionaires is a dangerous game. People would be much better served by a publicly accountable system with a consistent funding mechanism."
—Craig Aaron, Free Press

"While this approach doesn't pretend to solve all of the problems surrounding platforms or journalism, a tax on advertising revenues is a winnable fight and achievable through an act of Congress," charges the report, Beyond Fixing Facebook (pdf). "If we want to get serious about confronting corporate power and reversing local journalism's downward spiral, this is where to start."

Co-authored by Craig Aaron, Free Press president and CEO, and Timothy Karr, the group's senior director of strategy and communications, the report outlines how independent and local journalism has increasingly disappeared, to the detriment of democracy, as social media platforms and search engines have greatly expanded and "hastened the spread of hate speech and propaganda and exploited people's personal data and private information in myriad ways with little accountability, transparency, or consequences."

The report follows a recent series of layoffs at high-profile digital outlets including BuzzFeed, HuffPost, Yahoo, and VICE alongside the ongoing decline of local reporting. According to an analysis from Pew Research Center published last year, newsroom employment in the United States plummeted by 23 percent from 2008 to 2017, with a large portion of those jobs lost at newspapers.

As the crisis in journalism persists, so do mounting public concerns about the ever-expanding influence of major social networks—particularly, the report notes, "the abuse of targeted advertising," which "relies on data-harvesting regimes that individuals, groups, and government actors have abused to promote malicious and false stories, incite racists, and manipulate voters."

To tackle these intertwined issues that threaten democracy on a global scale, Aaron and Karr suggest three possible taxation frameworks Congress could impose on Silicon Valley. From the report:

free press endowment options

"Think of it like a carbon tax, which many countries impose on the oil industry to help clean up pollution," Karr said in a statement. "The United States should impose a similar mechanism on targeted advertising to counteract how the platforms undermine journalism and amplify content that's polluting our civic discourse."

The tax-funded endowment program, he added, "would put journalists back to work and restore some of the valuable news and information communities have lost over the past two decades. And the platforms—plus anybody else getting rich off the attention economy—would pay for it."

Tech giants have begun to reluctantly acknowledge criticism of their troubling data collection practices and contributions to mass disinformation—though efforts to address those problems also have been marred by undue censorship, and the hugely profitable companies may not respond favorably to a new tax.

Faced with mounting scrutiny, over the past year, Facebook and Google executives have supported journalism initiatives in what's seen by some as an attempt to deflect criticism of tech practices and the industry's destruction of local journalism.

However, "putting the fate of U.S. journalism in the hands of Silicon Valley billionaires is a dangerous game," said Aaron. "People would be much better served by a publicly accountable system with a consistent funding mechanism. Making the platforms pay their fair share to help clean up the mess they've created is a good way to start."

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