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Academics have come up with a unique taxpayer plan to save journalism, but Americans may not be willing to pay for it

A seven-member committee in Chicago University has suggested an idea of giving every American $50 through tax cuts so that they can donate the money to their favorite news outlets. Experts are divided though.
UPDATED MAR 31, 2020
(Source : Getty Images)
(Source : Getty Images)

With modern-day society and politics becoming more polarized, journalism, as a part of social discourse, has been affected. The rise of the Internet as a powerful engine of journalism has added more to the challenge of making it objective. A massive contradiction is found in the Fourth Estate of democracy where on the one hand, technology has seen people’s empowerment head to an irreversible point. On the other, it has also enabled parties with vested interests manipulate information and spread negativity. Controlling journalism and making it a tool of propaganda has become the norm of the day across the globe and the borderless and penetrative Internet has made countering it a very, very difficult task if not impossible.

In these circumstances, academics and researchers are still trying to find a remedy to save journalism -- the serious variety -- from the assault it faces. 

A group of academics has come up with a report ‘Protecting Journalism in the Age of Digital Platforms’ after a study was undertaken aiming to preserve the independence of the fourth eector. The study was conducted by a committee comprising the seven academics at Chicago Booth's Stigler Center for the Study of the Economy and the State, University of Chicago, and Guy Rolnik led it. Other co-authors of the report are Julia Cagé of Sciences Po, Paris; Joshua Gans of University of Toronto; Ellen Goodman of Rutgers University; Brian Knight of Brown University and Anya Schiffrin and Andrea Prat, both of Columbia University.

The committee studied the economic dynamics of journalism in the age of giant platforms over a year and came up with a proposal to cure the problem: Give every adult citizen $50 through an income-tax discount so that they can donate it to their favorite news outlet. 

The report said that despite growing interest for government subsidies to the media in the US, the press in the country still gets less-than-significant public aid. It cited the reason that public funding can indeed put the media’s editorial independence in jeopardy and while accepting it, the report came up with a new model to facilitate the media’s need for fresh financial resources. It proposed the idea of ‘publicly funded media vouchers that are privately allocated’.

“Our Proposal: Media Vouchers Our proposal to provide public funding for the news media can be summarized as follows: We propose to give each adult a media voucher worth a certain value—$50 in our proposal—per year from the US Treasury, to donate to her favored media outlet(s),” the report added.

How does the new system work?

The committee explains: “Every year, when filing their tax returns, each citizen indicates to the tax administration the media outlet(s) to which she wants to allocate her media voucher. The vouchers can be split in up to 10 different $5 vouchers. Technically, to preserve anonymity, this should work like electronic voting: each citizen is provided with a token and the allocation choices should not be linked to the addresses of the token holders (there exist many protocols of anonymous voting on blockchain-based networks that could be used).

The proposal also said that resale of the media vouchers would be forbidden by law.

It is not that the group’s model is something unprecedented. The city of Seattle has already led the way on this in the field of electoral politics. The report cited that in January 2017, Seattle put into action a 'democracy vouchers' system to support local elections. Next January, all registered voters will be sent an envelope containing four $25 democracy vouchers that they could donate to local political candidates they prefer. The vouchers were funded by the taxpayers and the candidates had to agree to certain conditions. The aim of the vouchers system was to get big money out of the political system.

The report conceded that evaluating the scheme scientifically was not an easy task but considered the exercise an overall success. The candidates who gained from the vouchers were generally successful in the electoral exercise and the donation system moved in a more egalitarian direction.

Replicating the Seattle political model in journalism

Replicating the Seattle political model in journalism would not be easy as the prevailing relations between the country’s political establishment and the mainstream media are far from cordial. Moreover, making the new system effective requires massive funds (in billions).

The Rolnik-led committee had in its mind the objections it could face and came up with some qualifiers to fend off criticism that the innovative model could face.

Among the suggestions are: Making only outlets that run serious news eligible and the degree of seriousness has to be determined by experts; splitting the $50 voucher in various ways; not giving any one outlet more than one per cent of the total; designating some or all money to local newspapers and digital sites since they are facing an acute business crisis.

Rick Edmonds, media business analyst at Poynter Institute for Media Studies, a Florida-based non-profit journalism school and research organization, recently penned an article on the Chicago University group’s innovative model to save serious journalism. Rolnik said the voucher idea was different from other subsidy plans in design and its target is to take politics out of allocations and allow news’s end-users to take the final call.

'Journalism a public good that has always been underfunded'

“We think journalism is a public good that has always been underfunded, and that has only gotten worse…but we did not want to go toward rebalancing the power between publishers and platforms,” Edmonds quoted Rolnik as saying.

“We don’t like that thinking for two reasons — there is a risk that it will create incentives for the wrong kind of content (e.g high-traffic clickbait) and the wrong kind of control. Second, if you subsidize an unholy alliance between monopolies, you are really just changing the rent and still beholden to the current market structure.”

The idea, which wants the flow of money to be controlled by the “public at large”, includes all forms of journalism today, be it print, broadcast or digital and according to Edmonds, Americans who are more fond of television as a source for local news might see their contribution going to a prospering local station and not to a newspaper fighting for survival.

The report also touched upon the debate over the protection of Section 230 of a 1996 regulation which protects platforms from the liability for anything users have uploaded. It proposes that waiver of the section be only continued if the companies abide by a set of conditions, including making their algorithms transparent. It feels the regulations of 1996 lag far behind the Internet that has fast evolved in 23 years. 

The idea, even if it struggles to meet the desired success, will certainly shake up some minds. The current state of affairs in journalism has caught the eye of some influential people, including presidential aspirant Bernie Sanders. In an article in the Columbia Journalism Review, Sanders diagnosed the root cause of the menace the newspaper industry faces today and offered advice in the form of anti-merger regulation and growth of non-profit sectors. 

What the experts felt about the idea

Edmonds told MEA WorldWide (MEAWW): “End users would be able to pick a right wing outlet (Fox News) or left wing (the Nation) if they wished or they might opt for a middle, right down the middle news source or one that is apolitical.”

He also added that his own preference would be to limit or at least begin with local news outlets for he feels the biggest gap lies there. Edmonds, who welcomed the academics for at least shifting the discussion of the problem towards a solution, said the group discusses the point of aiding local news outlets as a reasonable option.

'Americans will not take it seriously'

Journalist-professor at the King’s College, New York, Paul Glader, didn’t take the idea too seriously. He said only the mechanics of how the idea could work has been discussed and disagreed with the fact that Americans would seriously go for it.

“Our taxpayer subsidies tend to develop via industry lobbying such as the airline industry benefiting from taxpayer subsidy on airports or the auto industry benefiting from taxpayer subsidy on highways. But Americans don’t often like the idea of a new subsidy to an industry where they are forced to direct $50 to a news organization. They feel that is money out of their pocket,” he told MEAWW.

Glader also felt that the idea will have its political challenges. His idea of best subsidies in this case was more about indirect ones.

“Perhaps the best subsidies in our context are indirect ones such as granting newspapers cheaper postal rates or granting airwaves to broadcasters at a discount or free. And similar subsidies in the digital age might work better in the US context when arranged indirectly,” he added.