Examiner Editorial: Federal newspaper bailouts would negate the industry

Those immortal words “I’m from the government and I’m here to help you” are now being spoken to newspaper owners and their employees, all of whom are desperate to survive in the Internet age. The main voice behind the words is Sen. Ben Cardin, D-Md., author of legislation that would allow newspaper owners to restructure their properties as 501c(3) education foundations.

The idea is to lure rich donors who will bail out “quality newspapers” if the government will make doing so tax deductible. What will actually happen is newspapers will become government toadies.

Newspapers are the heart of America’s greatest publishing tradition — independent voices eager to expose official wrongdoing, to shine light in dark places, to speak for ordinary people. It’s no exaggeration to say that newspapers were so crucial to public debate that the American Revolution might never have happened without them.

From the republic’s earliest days, newspapers have been the watchdogs of the high and mighty. They’ve held them to account, criticizing their actions and even denigrating them, though usually with good reason. Policy decisions on wars, taxes, tariffs and debts also have been routinely judged, and often even more harshly. John Jay, for example, who was one of the “Publius” trio of authors of the “Federalist Papers,” once complained that he could travel at night by the light of his own burning effigies after signing the Jay Treaty of 1794 with Britain.

If newspapers become tax-exempt foundations, such independence will sooner or later be lost forever. The tax code bars such organizations from taking positions on legislation or endorsing candidates.

Just as think tanks now are routinely threatened with loss of their tax status for getting too close to politics, editors of every political stripe will find themselves at constant risk, forced to weigh the words of their editorials and news stories based on tax consequences rather than accuracy and merit. Even more ominously, the bill extends the offer of tax-free status to newspapers only so long as they remain “necessary or valuable in achieving an educational purpose.” No genius is required to figure out who will define what’s an appropriate educational purpose.

Cardin’s bill also makes exacting demands on newspapers’ operating procedures, should they choose the 501c(3) path. They would have to carry “local, national and international news stories of interest to the general public,” apparently excluding niche and neighborhood publications.

Advertising revenue would remain tax-free only if “the space allotted to all such advertisements in such newspaper does not exceed the space allotted to fulfilling the educational purpose of such qualified newspaper corporations.” But does that include Sunday ad inserts? Do the comics and the crosswords count as “educational”?

When you have to ask such questions about a bill, it’s a bad bill.

editorialeditorialsnewspapersOpinion

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

San Francisco Police Officer Nicholas Buckley, pictured here in 2014, is now working out of Bayview Station. <ins>(Department of Police Accountability records)</ins>
SF police return officer to patrol despite false testimony

A San Francisco police officer accused of fabricating a reason for arresting… Continue reading

Disability advocates protested outside the home of San Francisco Health Officer Tomas Aragon. (Courtesy Brooke Anderson)
Vaccine rollout plan for people with disabilities remains deeply flawed

On February 13, disability activists paid a visit to the house of… Continue reading

Mayor London Breed and Supervisor Shamann Walton announced that funding would be diverted from the police budget toward the black community in June 2020. (Kevin N. Hume/S.F. Examiner)
City directs $60 million toward Black community services and housing support

San Francisco released new details Thursday for how it plans to spend… Continue reading

The Stud, The City’s oldest gay bar which is vacating its longtime home at Ninth and Harrison streets after more than 50 years, on Thursday, May 21, 2020. (Kevin N. Hume/S.F. Examiner)
City’s nightlife recovery fund approved but struggling business owners fear relief may come too late

As San Francisco’s nightlife scene approaches nearly a year of a complete… Continue reading

Riordan Crusaders versus St. Ignatius Wildcats at JB Murphy Field on the St. Ignatius Prepatory High School Campus on September 14, 2019 in San Francisco, California. (Chris Victorio | Special to the S.F. Examiner)
State allows high school sports to resume, but fight is far from over

For the first time since mid-March 2020, there is hope for high… Continue reading

Most Read