Subscriber tax credit could save newspapers

The April 6 issue of The Nation contains an unapologetic proposal to create governmental subsidies to save newspapers. Robert McChesney and John Nichols propose a simple solution to the plight of staggering newspapers: A federal tax credit for the first $200 anyone spends on newspapers subscriptions. McChesney and Nichols propose restrictions that would eliminate many small dailies (a 24-page minimum for each edition and a 50 percent-plus news hole), but their basic idea is sound.

Their fundamental argument is that a free press is a public utility that is essential to democracy. They quote Supreme Court Justice Hugo Black saying "a free press is a condition of a free society," and they point out that the United States has a long history, going back to Jefferson and Madison, of providing support for an independent press through generously favorable postal rates and public notice advertising. The Nation article does not ignore media corporations' fault for the current crisis in the newspaper business. The big media corporations have ignored their public trust to provide relevant, essential information about politics and government, stooping instead to fill their pages and readers' brains with the mush of celebrity gossip. But the rapid decline of newspapers threatens to leave major American cities with no newspaper, and that means no watchdog over local governments, institutions and businesses.

A tax credit for newspaper subscriptions would be a modest subsidy for an indispensable and irreplaceable watchdog. The tax credit would go to subscribers, not the papers, and would thereby prevent any governmental influence over newspaper content. The credit could save struggling existing newspapers and might even encourage new newspapers to compete. Readers could choose their local daily or pick The Washington Post or New York Times instead. My daily newspaper subscription runs far less than $200 a year, but I would guess that most newspapers would quickly raise their subscription rates to ensure subscribers got the maximum tax credit.

Of all the proposals for saving newspapers — charging fees for access to online news, barring news aggregators from linking to newspapers' work, raising subscription rates far above current levels, turning newspapers into nonprofits that beg for funding from readers (the NPR model), seeking subsidies from foundations, etc. — the subscription tax credit seems most sensible and workable.

The Nation's article is long and thorough, but it's worth the time it takes to read it.