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FTC Chairman: Tax on CE is ‘Terrible
looks like the Federal Trade Commission won’t
subsidize newspapers by taxing technology after all.
must have read my memo (followed by CEA chief Gary Shapiro’s
plea in the Huffington Post).
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.)
money would be used to subsidize poorly run news outlets
suffering the “challenges … of the Internet
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).”
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 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.”
those other taxes ...
tax on CE is only one recommendation studied by the
FTC to save journalism from the evils of the Internet.
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.
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?
do you say to that, Chairman Leibowitz?
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 ...."