The Pravda-ization of the American Press

A little-discussed piece of the Democrats’ statist legislative agenda is among the most dangerous to liberty long term; the schemes to subsidize private news and media organizations through tax favoritism. Under a federal proposal, “newspapers, digital news outlets and radio and television stations could claim a payroll tax credit for employing eligible local journalists,” according to the Associated Press. On the New Jersey state level, subscribers to local journalism companies would get a tax deduction, according to the New Jersey Star-Ledger.

It’s true that all kinds of government favors are dished out to private businesses. But subsidizing media companies carries a special danger, because media companies exist at the intersection of economics and freedom of the press.

In Help save local news: Give subscribers a tax break, the New Jersey Editorial Board (SLEB) writes on NJ’s proposal;

A New Jersey lawmaker is trying to bolster local journalism after more than a decade of layoffs, with some help from the government: A tax deduction for subscribers.

Under Assemblyman Roy Freiman’s bill, you’d get a $250 deduction on your state income taxes if you subscribe to a New Jersey paper or digital publication. For most families, it would be a small savings. But every bit helps.

The obvious objection is, if private citizens don’t choose to patronize these journals, why should they be forced, through the back door of tax favors for subscribers, to pay to support these journals? If the market doesn’t support these local media companies, why should the government be bailing them out? Anticipating this line of dissent, the SLEB asks;

Why, you might ask, should newspapers get a subsidy from the government? Well, other businesses do. 

This point was inevitable. Once precedents are set, they tend to grow. And government subsidies to businesses have grown like malignant cancer. Of course, the proper response to the SLEB’s question is, Why should any business that can’t succeed in the market get a government subsidy, directly or through tax favors? The answer, of course, is that they shouldn’t. *

But there’s a much larger danger lurking than merely the economic objection. In an amazing paragraph, the SLEB seems to be pointing straight at the danger involved, without even realizing it:

[The local media] have a better-informed opinion of Joe Biden or Phil Murphy than their state assemblyman, or a massive local economic development project like the $400 million Wind Port in Salem County. “I felt that I lost my voice at the Statehouse,” Assemblyman John Burzichelli (D-Gloucester) lamented, citing the lack of quality, in-depth coverage of South Jersey.

So what Burzichelli and Freiman are doing, essentially, is looking to buy, with taxpayer money, more “quality” reporting in support of their agendas; but quality, defined by whom? What kind of editorial or news content will local newspapers, which apparently includes statewide newspapers like the Star-Ledger in the “local” category, be able to maintain when politicians they depend on for financial support are counting precisely on the local news outlet to be their “voice?” What independence will be left to them when the likes of Assemblyman John Burzichelli have legislative control over the economic lifeblood of the publication? Will an editorial board of a newspaper that is at least partially dependent on tax favors be as ready to criticize politicians or their programs—politicians who have the power to rescind the tax favors? How will a news outlet respond when Burzichelli and his ilk complain about the “quality” of some “in-depth coverage” put out by the outlet?

As I’ve said, the press is not like other businesses. With the press, as I’ve said, you’re dealing with the direct intersection of economics and First Amendment liberties. The SLEB seems to get, on some level, the inherent danger:

Because this tax break is going to the subscriber, it has the advantage of not running aid to news organizations directly, avoiding the issue of the government picking winners and losers. 

Well, how is the government indirectly “picking winners and losers” any different? Direct or indirect, it’s a distinction without a difference. President Biden’s federal bill would direct the tax break directly to the company, not the subscribers. Presumably, the SLEB is against that bill, as its stated premise indicates. But, either way, press outlets would become dependent, at least in part, on politicians for their survival.

Independence from any government interference is vital to a free press. But with media companies tethered to government for economic support, their independence would be, of necessity, at the very least compromised. 

I don’t want to get too apocalyptic here. Pravda was an organ of the ruling Communist Party of the old Soviet Union under a state that controlled the flow of information across the board.** Under the federal and NJ bills, any news outlet would be free not to take the federal tax credit to preserve their integrity, although the Jersey deduction is more problematic given that it applies to subscribers. On the surface, nothing about these bills includes any direct government requirements in regard to content. 

But we can’t minimize the danger, either. The mere fact of government financial support has got to figure into the thinking of the editors in regard to content, sooner or later. This would be especially true of economically marginal media enterprises who may feel they can’t survive without the tax favors. This government lurch into the economics of the free press is a direct assault on press independence, and by logical extension on press freedom. It is, in my view, a violation of the First Amendment’s unequivocal ban on the government abridging freedom of the press. It will, in the end, through practice and precedent, be the end of the independent press if they are not nipped in the bud. “Freedom of the press” would become a hollow slogan. 

For New Jersey, it’s bill is a continuation of the Democrats’ assault on Press freedom under Governor Phil Murphy. Now it is spreading to the Federal level. These bills set America on the road to the Pravda-ization of the American press. 

* [I have often pointed out that a tax credit or wrote-off is not a subsidy, and that’s true. But unlike education tax credits or the home mortgage interest deduction, which applies to all parents of school-age children or all homelowners without discrimination, a credit or write-off narrowly tailored to specific private entities while excluding other private entities—in this instance, “local” media but not national media—it is government favoritism, and has the same effect as a subsidy. So, in this article, I will treat tax credits, write-offs, and subsidies as essentially the same thing.]   

** [Pravda was subsequently sold off, and eventually split up, after the fall of the Soviet Union.]

Related Reading:

New Jersey Civic Information Consortium’s Immoral Taxpayer Grab

Keep the press free from the academics and the politicians by Paul Mulshine

NJ Government Takes First Step to Becoming ‘the Sole Arbiter of Truth’

N.J. just became the first state to help revive local news By Susan K. Livio -- NJ Advance Media for NJ.com