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The IRS has granted nonprofit status to a daily newspaper

175 points by cpeterso 7y ago

miiiiiike 7y ago
Tax-deductible support of local news is a fantastic idea.
- eru 7y ago
  Why? Creating yet more loopholes doesn't sound like a good idea.
  - ian0 7y ago
    Not sure it could be classified as a loophole really. Unless your an employee or affiliate of the newspaper itself in which case it likely verges on fraud. It's more like a government-led incentive scheme to support.
    - thombat 7y ago
      In general I think that if the State wants to support some activity it should do so directly by allocating funds, not by making the tax system more complex. The introduction of the GST consumption tax in NZ was admirable in this respect: prior to it there were layers of sales taxes and special tweaks to try to promote specific industries, so the final price at a checkout could be dismayingly more than the sum of the shelf prices. With GST there was a single tax rate, no retail exceptions, and no "sticker shock" since quoting tax-exclusive prices in retail was illegal. About the same time the personal income tax mechanism became simple enough that for ordinary employees four sides of A4 sufficed, completed in half an hour. Bliss! (normalised to expectations of bureaucracy) A contrasting system: once I bought a T-shirt at a general store in Scotland and having paid the shopkeeper said genially "you won't be needing that any more" and snipped a small cloth loop from between the shoulders, explaining that in doing so he had converted it from a child's pinafore (VAT rate 0%) to a man's T-shirt (17.5% at the time). I want to live in a country where all children are adequately clothed but it seems to me simpler to fund that directly, e.g. via a benefit for those with dependent children, possibly income-tested. If the concern is that the "feckless poor" will just waste the money then I'd question (a) whether this popular demon is actually so common and (b) whether such people switch from proper parenting to wastreldom on the basis of a one-fifth price increase.
      - eru 7y ago
        Yes. Thanks for the explanation! The 'opposite side' of that is also true: I'd rather see a carbon tax than eg photovoltaic subsidies. The latter requires picking winners, and the recipients need to interact with bureaucracy to claim. The former rewards simply consuming less just as much as eg switching to renewables; and you don't need a lawyer to claim your (relative) rewards of lower taxes.
        buboard 7y ago
        You can tie subsidies to the "amount of CO2 spared compared to the average". Carbon tax creates the moral hazard of normalizing pollution, as long as you pay your tax.
        jermaustin1 7y ago
        But due to the higher costs, all but the wealthiest will be "forced" into making changes to their patterns. There was a recent Planet Money episode about these Pigouvian taxes[1]. 1: https://www.npr.org/2019/10/29/774494691/episode-949-the-pigou-club https://www.npr.org/2019/10/29/774494691/episode-949-the-pig...
        eru 7y ago
        You seem to be using a non-standard definition of moral hazard? (https://en.wikipedia.org/wiki/Moral_hazard https://en.wikipedia.org/wiki/Moral_hazard) "[A]mount of CO2 spared compared to the average" seems to be hard to define: if I burn lots of natural gas to create electricity, I release less natural gas than if I burn coal. But I release more than if I had managed to make do without that electricity. But yes, a carbon tax is exactly that: if you pay your tax, releasing CO2 is legally and morally fine. There's a certain amount that we can safely release. (That amount is smaller than what we release today.) The climate doesn't care about who's releasing CO2. So we use willingness to pay taxes to ration out that limited supply of allowable CO2 emissions. Eg your fear seems to be that rich people can just buy indulgences and keep sinning, instead of having to repent? I say compared to giving every person an equal share of allowable emissions directly, I'm happy to personally emit a bit less, and have some ultra rich person indulge in return for them paying crazy amounts of taxes. I don't care about their moral fibre as long as they pay up. If too many people decide to just pay the tax instead of cut their emissions, we'd need to adjust the tax rate. Because of inflation, population growth, advances of science etc, we would want to revise the tax rate every once in a while anyway. (A cap-and-trade system would do that adjustment of the price automatically, but it seems that in practice it's hard for politicians to refrain from handing out permits for free and handing out too many. Eg the EU system would have worked better, if all permits would have been auctioned off by the government instead of being handed out to previous polluters for free.)
  - matt4077 7y ago
    "Yet more loopholes" is what happens when you refuse to think for yourself and instead need to cram everything into tiny, generalising, categories. A better framework for evaluating policy is to ask if their objective is worthwhile and if their mechanism is fit: Local news is dying/dead in many regions, yet it is essential for the functioning of democracy. Asking people to make informed decisions without reliable reporting works about as well as a thermostat without a thermometer, i. e. it doesn't. Since everyone profits when others make better decisions at the voting booth, there is a direct argument to be made that the benefit of people subscribing to a local paper goes not to them, but their community, especially since important stories also tend to reach non-subscribers. Assuming one agrees with that point and isn't part of the all-journalists-are-corrupt-marxist-crowd (or the alternative some-blogger-can-do-it-better-crowd), one would want to find ways to support local news. But direct subsidies run into obvious problems. Reducing taxes would then be an obvious way to allow journalism to function: Its benefit is proportional to revenue and therefore preserves the market mechanisms. Books and newspapers actually are exempt/partially exempt from VAT in many countries. But VAT just isn't a relevant factor in most of the US. You can consider this "just a loophole" in the way that "don't put arsenic on pizza" is "just another regulation".
    - eru 7y ago
      Who decides what's tax-exemption worthy journalism versus yellow press filth / entertainment? Any reduction of taxes on a special category means a relatively heavier tax burden on other necessities. Like tampons. See https://en.wikipedia.org/wiki/Tampon_tax https://en.wikipedia.org/wiki/Tampon_tax for equivalent outrage. Btw, I'm all in favour of allowing people to put arsenic on pizza, as long as its clearly labelled.
    - VLM 7y ago
      How is local news essential to democracy or help make better voting decisions? For example, according to Patch (which is not nonprofit) this morning, if I exclude the vast amount of advertising and pathological fake news and focus on actual local coverage, in my hometown the local electronics recycling program is temporarily moving because of road construction, and three miles across town the police have reported three recent delivery package thefts. How would either story influence me being more or less likely to vote for Trump in 2020? There's been an intense cultural shift towards not making informed decisions in the voting booth; one MUST either vote along demographic identity lines or optionally follow groupthink or keep very, very quiet lest suffer possibly violent consequences. If those cultural trends change, then there would be motivation for informed voting. However, "everyone in charge" at this time likes the system and its a disinformation to pretend informed voting is relevant at this time. The problem at this time isn't "voter education" but "conform to your group or be punished".
  - jcranberry 7y ago
    Maybe all solely news media companies should be non-profits. Current incentives have led the news media to churnalism, sensationalism, and the near extinction of long form journalism.
    - abawany 7y ago
      I agree about churnalism but do you really want your tax dollars to pay for "The Enquirer"? Cause you know they will get classified as a "newspaper".
      - eru 7y ago
        And arguably they provide more useful news for most people than 'serious' newspapers that get you the latest political outrage.
- witherk 7y ago
  I don't think influencing the media should be tax deductible. On the other hand,it does seem like the autotrophs of the journalism ecosystem are dying off pretty quickly and something has to be done.
- conanbatt 7y ago
  Why? Now the newspaper is conditioned by the government.
  - Dylan16807 7y ago
    So is every business.
    - conanbatt 7y ago
      Then lets make everyone a non-profit for tax purposes, since its the same.
      - joshuaissac 7y ago
        How is it the same? The newspaper is an actual non-profit (the shareholders had to give up control to get the status) but what you seem to be suggesting is to give for-profit businesses non-profit status for tax purposes even when they are not actually non-profit organisations. Or do you mean that businesses should be able to convert to non-profit organisations when the business is no longer viable? I can agree with that sentiment. If the shareholders are prepared to give up control, and the creditors are paid off, it would be great if businesses converted to tax-exempt non-profits instead of going bust entirely.
        conanbatt 7y ago
        Previous poster implied that all businesses are influenced by government so the non-profit status does not have additional bindings. I answered that if all businesses are regulated by government regardless, why collect taxes at all, since they are all extensions of government willpower.
        Dylan16807 7y ago
        The reason the government collects taxes is to make money, not to extend willpower to the businesses it taxes. The extra influence for non-profits is a side effect and not very large compared to baseline laws. It's not a goal, and it wouldn't make up for the loss of revenue; it serves a much smaller and completely different purpose.
- cdolan 7y ago
  Not to the same scale of Amazon, but UPMC (Pittsburgh’s regional medical giant) is a non profit who made $400 million profit a few years ago to some outrage. Their CEO is a pretty high flying guy for being a non profit! Suspiciously they made near zero profit the next year.
  - Shivetya 7y ago
    non profit doesn't mean the executive level goes without, charities are infamous in this regard. that colleges can hide their endowments behind similar is just more proof we have a tax system designed to benefit the few and not the many I have no issue with local papers going non profit, however the idea they can do it any not cross into the political side is going to be a stretch. either from the weight given to certain stories, selection of letters to editors, down to opinion pieces, there are many ways to skirt the rules
- Someone1234 7y ago
  Congress should bring back the "FCC fairness doctrine"[0] and tie it into tax deductible for news outlets. If you're willing to be an unbiased source for news, you get tax benefits, if you want to be partisan you're a private company. [0] https://en.wikipedia.org/wiki/FCC_fairness_doctrine https://en.wikipedia.org/wiki/FCC_fairness_doctrine
  - dmix 7y ago
    We have a news company called CBC here in Canada that is supported by tax payers and is supposed to be politically neutral but everyone knows its a left-wing partisan news source. It's just the nature of the business (ie, editors/writers/university english depts tend to be left leaning and then fill the news room with like minded people, with maybe one token conservative guy like NYT does) and even more so when its existence becomes tied to government spending and policy. Not to mention how hysterical and FUD-filled politics has gotten recently I'm highly skeptical that anything non-partisan wing will be tolerated.
    - abawany 7y ago
      You know, I disagree about CBC. I get its newsletters, the daily Alexa bcast, and see its YT videos. From my US-based perspective, it seems that they went well out of their way to be balanced in their coverage. They could have buried SNC Lavelin but it was amazing how long they kept up coverage. Their YT channel had daily "Scheer campaign day X" but I didn't see the corresponding videos for Trudeau.
      - dmix 7y ago
        The mistake people always make is assuming left wing partisan = blind support for Trudeau/liberal party. Which is not what that means. The CBC isn't being accused of being a propaganda arm for a particular party. Not is it not about just blatantly supporting a single centre-left political party. The biases are about ideologies and how idea/stories/people are presented, spun, or casually dismissed in general. A big one is what sources are used. Additionally, even shamelessly partisan rags like WaPo or Vox would be critical of obvious democrat mistakes too. The bar isn't that low yet where something like SNC wouldn't be covered. It's often in the details and the stuff not said or treat uncritically.
- abawany 7y ago
  (Not trying to virtue signal) I pay for my news subscriptions and really think that is worth doing but I don't agree that news should be tax deductible for the following reasons: * We already have enough tax loopholes. * The definition of "newspaper" is going to get pretty ridiculous fast with this loophole. Do you want your tax dollars to support Goop Weekly? Maybe (I don't know you after all), but I certainly and vehemently do not.
yoelo 7y ago
The requirement of 401c(3)s to be "non-political" looks like a pretty weird to someone that doesn't live in the US. Why do non-profits have to work with that suppression while for-profit companies won't? Does anyone here know the historical context for this?
- jacquesl 7y ago
  Good question. It sounds strange to me too. I wonder if there’s some unintuitive loophole like the paper itself doesn’t write political articles and sources them from other places.
  - garmaine 7y ago
    No, it's just what a 501(c)(3) is: a religious, charitable, scientific, literary, or educational organization, or a handful of other more specialized causes. Note that like a corporation, a 501(c)(3) is allowed to spend a portion of its funds on lobbying, it just can't be the prime focus. There are other non-profit organization types that are specifically suited for political action. Labor unions are 501(c)(5) and often very political. But most political organizations are regulated under section 527 of the code. The reason is simple: different codes require different reporting requirements. The 501 codes are heavily scrutinized by the IRS to make sure they are legitimate charitable causes. 527 orgs are overseen by the FEC to make sure that they obey political campaign financing laws. The reporting requirements for both are different.
  - ghaff 7y ago
    501(c)(3)s can write political articles. They just can't engage in overt political activity. For example, my understanding is that a non-profit shouldn't endorse a candidate and certainly shouldn't make political donations or otherwise actively participate in a political campaign. They're not prohibited from covering a campaign or writing about proposed legislation though.
- miiiiiike 7y ago
  Political Campaign Activities - Risks to Tax-Exempt Status: https://www.councilofnonprofits.org/tools-resources/political-campaign-activities-risks-tax-exempt-status https://www.councilofnonprofits.org/tools-resources/politica...
grubb 7y ago
Just my two cents: I grew up in Utah and did my undergraduate degree there. The Salt Lake Tribune is a great newspaper (I subscribed while living in the state) and it has been rough watching them downsize and lose some great staff over recent years. I am very much of the opinion that good local journalism is a necessity for holding people accountable. For example: the work the Salt Lake Tribune received a Pulitzer for [0]. Anything to help good local journalism continue and survive is nothing but a win in my view. [0] https://www.sltrib.com/news/2017/05/07/salt-lake-tribune-wins-pulitzer-for-campus-rape-coverage-praises-victims-for-sharing-their-stories/ https://www.sltrib.com/news/2017/05/07/salt-lake-tribune-win...
- NorthOf33rd 7y ago
  I’m still here and this is incredibly important for our community. The tribune is the only major news outlet not owned by the LDS church, and is an important tempering force. Over the years they’ve given up some of their autonomy due to joint operating agreements with LDS Church owned Desert News, but without them salt lake would be a large metro without a non-church controlled newspaper. Which is really strange to write down. Salt lake looks poised to elect its first LDS mayor in something like 50 years today which I think speaks volumes to the weakening of slc secular news sources. One could argue that it’s due to the modernization of the church on some key issues, but based on the coverage of the candidates, I’m not so sure. On a national scale, I’m really hopeful this trend continues. Newspapers do incredibly important work on “boring” local issues that no one else is able to do.
  - catacombs 7y ago
    > The tribune is the only major news outlet not owned by the LDS church, and is an important tempering force. In Utah. Let's make sure that distinction is clear.
    - briankelly 7y ago
      That was plenty clear from the context.
    - 7y ago
coldtea 7y ago
How is that strange? All kinds of media are/can be nonprofit where I am from...
- tomhoward 7y ago
  It’s unusual for a for-profit corporation to switch to a non-profit. Other U.S. media orgs like PBS are non-profit, but have been that way from the start.
- perl4ever 7y ago
  Well, we don't do it that way in the dystopian US of the 21st century. Disregarding obscure organizations like the Associated Press, there are only about 172 nonprofit news outlets[1] founded in the last 30 years or so! The concept is practically unheard of. [1]https://en.wikipedia.org/wiki/Non-profit_journalism https://en.wikipedia.org/wiki/Non-profit_journalism
  - coldtea 7y ago
    Not sure if ironic. 172 is definitely on the low numbers for a country of 350M -- especially with 50 states that could have their own local news non-profits (tv, radios, newspapers, online version of the latter two, etc).
    - vonmoltke 7y ago
      The study had a relatively narrow definition of what counted: https://www.journalism.org/2013/06/10/methodology-30/ https://www.journalism.org/2013/06/10/methodology-30/ Summary: > Outlets must be domestic. > Outlets must be active, though they do not need to be publishing new content on a regular basis to be included in the study. > Outlets must be young. > Outlets must be primarily digital. > Outlets must produce original reporting. > Outlets sponsored by an institution must produce journalism that focuses beyond its own walls. "Young" and "primarily digital" are the biggest restrictions.
    - perl4ever 7y ago
      Only 30-50 people die from dog bites in the US per year. That's an average of one or less per state! Does that mean "dog bites man" is news, too? Also, your tone suggests you're ignoring the word "founded".
Illniyar 7y ago
What is a "legacy newspaper"? Is it just a newspaper?
- tomhoward 7y ago
  “Legacy” just means old or traditional or hailing from a past era, as distinct from publications that have been newly developed in recent times for modern markets and technologies. It’s also distinct from established media orgs like PBS that have been nonprofit from the start.
elcapitan 7y ago
Time for Bezos to register the Washington Post as nonprofit and make Amazon a subcompany.
- mieseratte 7y ago
  Exactly my thought! This has "tax loophole" written all over it. Company gets to subsidize favorable propaganda, while at the same time getting a nice tax write-off. Edit: For those downvoting, would you care to elaborate? I don't see how this won't be abused. What am I wrong about here?
  - not_a_cop75 7y ago
    I'm sure having one of the most powerful men in the world run a newspaper is going to produce unbiased journalism.
  - cartoonworld 7y ago
    I would imagine a non-profit isn't able to well.... profit as much. And if I know one thing it is that a rich guy loves his money as much as a preacher loves the Lord.
    - jtbayly 7y ago
      Non-profits are allowed to profit all they want. The NFL is a non-profit org.
      - lostapathy 7y ago
        The league is - the teams are not.
        jtbayly 7y ago
        That's what I meant. Apparently it changed. But so what? The league itself made enough money to pay Roger Goodell $44M in 2013. As a non-profit.
jonny383 7y ago
Great - the IRS is now giving tax-free status to the mormon church's for-profit arms.
- richeyrw 7y ago
  You understand that the Salt Lake Tribune has traditionally been dedicated to being critical of the Mormon church? Right?
  - NorthOf33rd 7y ago
    They lost some of their teeth after the joint publishing agreement with Deseret News, but other than npr they are the only major news outlet of any medium in salt lake that is willing to be critical of the church. And it’s not like KUER has much airtime devoted to local news.
corodra 7y ago
I'm going to push away the dubiousness due to the LDS issue and I'm going to assume that the SLT is a good newspaper in the following comment. To be forthright in my bias, my general views on Utah are not that great though... stemming from their stupid fucking criss-crossing streets and over usage of concrete barriers in the middle of the road all the fucking time. Cough, excuse me. I'm really curious about the repercussions of this. If this works out decently for them, I'm pretty sure other news outlets of all shapes and sizes will follow in the next few years. Maybe this is good. There's a potential here to revitalize the news system in general. They won't be so dependent on pandering to a select few corporations and bullshit advertising methods. Maybe this will bring some more unbiased... wait, no probably not. Not being funny, that just made me realize the folly. If donations are going to be a big play, the only way to really get good donations is to appease a certain viewpoint. I don't know... maybe there's a way to mitigate that? It does say no more political endorsements... eh... I doubt that'll happen. I was hoping to have a good, happy train of thought on this one. Then I remembered that all humans are assholes. Fucking hate driving in Godless wasteland of a state.
- AnimalMuppet 7y ago
  Criss-crossing streets? You mean, a grid system? What's so bad about that?
  - corodra 7y ago
    Yea grid roads are unique to only utah... seriously? Continously flow intersections and diverging continuous intersections. You end up driving on the left hand side and drive all wonky. Its terrifying to encounter the first time and makes no logical sense. They brought it to colorado springs and it's so amazingly pointless.
    - AnimalMuppet 7y ago
      Oh, those. Yeah, those are annoying. There aren't that many of them, though.
    - catalogia 7y ago
calderarrow 7y ago
One of the subtle considerations when discussing non-profits is that any organization can be a non-profit, but in order to get tax exemption you have to meet certain requirements related to your mission and how your organization is organized [0]. One of the exempt requirements is education, and there are numerous ways in which it could be argued that a local news outlet can operate as a medium for educating local constituents of important events. I spent a number of years working in public accounting in the DC area, almost exclusively with non-profit organizations on both the audit and tax side. Tax exempt organizations come under a fair amount of scrutiny, because of how valuable their tax exemption status is, and the government checks everything from executive compensation to programatic expenditures. Most have to get audited annually, and you can read their audited financial statements just like how you could read Apple's or Google's [1]. A key note about tax exempt organizations is that as soon as they start to earn income from activities that compete with typical for-profit organizations, they have to pay corporate taxes on that income. I saw some people implying that Amazon could become a subcompany of WaPo and avoid taxes, which, while technically is in the realm of possibility, would have 3 major consequences: firstly, the 501(c)3 non-profit parent organization can't make dividend-like disbursements to shareholders, so the money would be tied up in the non-profit, secondly, excessive compensation to employees could result in massive punitive taxes [2], and thirdly, the revenue that WaPo would receive would most likely be taxable unrelated business income. Bezos would be better off keeping Amazon separate and donating cash to WaPo -- at least then he'd be able to get a write off. [0] irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3 [1] There are several sites, but guidestar.org is the one I've mostly used. [2] irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions
frankydp 7y ago
It is my opinion that in order to retain freedom of the press protections an organization should be required to be non-profit, not specifically 501c3 of course.
- mieseratte 7y ago
  What would that solve, specifically?
- TallGuyShort 7y ago
  Having a non-profit tax status doesn't prevent you from paying large salaries if you make more money. That really wouldn't do anything to take away the incentive the press has to sell more news.
NoblePublius 7y ago
Why doesn’t Bezos do this to the Amazon Post?
equivocates 7y ago
The Texas Tribune is a non-profit[1] and has been so for 10 years.[2] [1]: https://www.texastribune.org/about/ https://www.texastribune.org/about/ [2]: https://www.texastribune.org/series/10th-anniversary/ https://www.texastribune.org/series/10th-anniversary/
- chrispeel 7y ago
  The Texas Tribune appears to have been created in 2009 as a non-profit. In contrast, the Salt Lake Tribune was founded in 1868, and has been for-profit until now. I believe the unique thing about the SL Trib is its transition from for-profit to non-profit. [1] https://en.wikipedia.org/wiki/The_Texas_Tribune https://en.wikipedia.org/wiki/The_Texas_Tribune [2] https://en.wikipedia.org/wiki/The_Salt_Lake_Tribune https://en.wikipedia.org/wiki/The_Salt_Lake_Tribune
zacharytelschow 7y ago
Plenty of newspapers have been unprofitable for a long time. Oh wait... Headline was slightly different ;)
rolltiide 7y ago
the thing that sucks about 501(c)3 is that there are no deductible expenses any more So they can be used in conjunction with other entities to really amplify the tax benefits If you think of them like 401k on steroids It can help, as deductible contributions are unlimited up to 50% income and anything above that rolls over into the next year, and you can do a bunch with asset prices and velocity. Different parts of the tax code pull deductions before or after AGI, so you can game this forever all while the masses can only express their discontent by targeting “income tax rates” and the edgiest of them all says “marginal income tax rates”

175 points by cpeterso 7y ago

miiiiiike 7y ago

Tax-deductible support of local news is a fantastic idea.

eru 7y ago
Why? Creating yet more loopholes doesn't sound like a good idea.
- ian0 7y ago
  Not sure it could be classified as a loophole really. Unless your an employee or affiliate of the newspaper itself in which case it likely verges on fraud. It's more like a government-led incentive scheme to support.
  - thombat 7y ago
    In general I think that if the State wants to support some activity it should do so directly by allocating funds, not by making the tax system more complex. The introduction of the GST consumption tax in NZ was admirable in this respect: prior to it there were layers of sales taxes and special tweaks to try to promote specific industries, so the final price at a checkout could be dismayingly more than the sum of the shelf prices. With GST there was a single tax rate, no retail exceptions, and no "sticker shock" since quoting tax-exclusive prices in retail was illegal. About the same time the personal income tax mechanism became simple enough that for ordinary employees four sides of A4 sufficed, completed in half an hour. Bliss! (normalised to expectations of bureaucracy) A contrasting system: once I bought a T-shirt at a general store in Scotland and having paid the shopkeeper said genially "you won't be needing that any more" and snipped a small cloth loop from between the shoulders, explaining that in doing so he had converted it from a child's pinafore (VAT rate 0%) to a man's T-shirt (17.5% at the time). I want to live in a country where all children are adequately clothed but it seems to me simpler to fund that directly, e.g. via a benefit for those with dependent children, possibly income-tested. If the concern is that the "feckless poor" will just waste the money then I'd question (a) whether this popular demon is actually so common and (b) whether such people switch from proper parenting to wastreldom on the basis of a one-fifth price increase.
    - eru 7y ago
      Yes. Thanks for the explanation! The 'opposite side' of that is also true: I'd rather see a carbon tax than eg photovoltaic subsidies. The latter requires picking winners, and the recipients need to interact with bureaucracy to claim. The former rewards simply consuming less just as much as eg switching to renewables; and you don't need a lawyer to claim your (relative) rewards of lower taxes.
      - buboard 7y ago
        You can tie subsidies to the "amount of CO2 spared compared to the average". Carbon tax creates the moral hazard of normalizing pollution, as long as you pay your tax.
        jermaustin1 7y ago
        But due to the higher costs, all but the wealthiest will be "forced" into making changes to their patterns. There was a recent Planet Money episode about these Pigouvian taxes[1]. 1: https://www.npr.org/2019/10/29/774494691/episode-949-the-pigou-club https://www.npr.org/2019/10/29/774494691/episode-949-the-pig...
        eru 7y ago
        You seem to be using a non-standard definition of moral hazard? (https://en.wikipedia.org/wiki/Moral_hazard https://en.wikipedia.org/wiki/Moral_hazard) "[A]mount of CO2 spared compared to the average" seems to be hard to define: if I burn lots of natural gas to create electricity, I release less natural gas than if I burn coal. But I release more than if I had managed to make do without that electricity. But yes, a carbon tax is exactly that: if you pay your tax, releasing CO2 is legally and morally fine. There's a certain amount that we can safely release. (That amount is smaller than what we release today.) The climate doesn't care about who's releasing CO2. So we use willingness to pay taxes to ration out that limited supply of allowable CO2 emissions. Eg your fear seems to be that rich people can just buy indulgences and keep sinning, instead of having to repent? I say compared to giving every person an equal share of allowable emissions directly, I'm happy to personally emit a bit less, and have some ultra rich person indulge in return for them paying crazy amounts of taxes. I don't care about their moral fibre as long as they pay up. If too many people decide to just pay the tax instead of cut their emissions, we'd need to adjust the tax rate. Because of inflation, population growth, advances of science etc, we would want to revise the tax rate every once in a while anyway. (A cap-and-trade system would do that adjustment of the price automatically, but it seems that in practice it's hard for politicians to refrain from handing out permits for free and handing out too many. Eg the EU system would have worked better, if all permits would have been auctioned off by the government instead of being handed out to previous polluters for free.)
- matt4077 7y ago
  "Yet more loopholes" is what happens when you refuse to think for yourself and instead need to cram everything into tiny, generalising, categories. A better framework for evaluating policy is to ask if their objective is worthwhile and if their mechanism is fit: Local news is dying/dead in many regions, yet it is essential for the functioning of democracy. Asking people to make informed decisions without reliable reporting works about as well as a thermostat without a thermometer, i. e. it doesn't. Since everyone profits when others make better decisions at the voting booth, there is a direct argument to be made that the benefit of people subscribing to a local paper goes not to them, but their community, especially since important stories also tend to reach non-subscribers. Assuming one agrees with that point and isn't part of the all-journalists-are-corrupt-marxist-crowd (or the alternative some-blogger-can-do-it-better-crowd), one would want to find ways to support local news. But direct subsidies run into obvious problems. Reducing taxes would then be an obvious way to allow journalism to function: Its benefit is proportional to revenue and therefore preserves the market mechanisms. Books and newspapers actually are exempt/partially exempt from VAT in many countries. But VAT just isn't a relevant factor in most of the US. You can consider this "just a loophole" in the way that "don't put arsenic on pizza" is "just another regulation".
  - eru 7y ago
    Who decides what's tax-exemption worthy journalism versus yellow press filth / entertainment? Any reduction of taxes on a special category means a relatively heavier tax burden on other necessities. Like tampons. See https://en.wikipedia.org/wiki/Tampon_tax https://en.wikipedia.org/wiki/Tampon_tax for equivalent outrage. Btw, I'm all in favour of allowing people to put arsenic on pizza, as long as its clearly labelled.
  - VLM 7y ago
    How is local news essential to democracy or help make better voting decisions? For example, according to Patch (which is not nonprofit) this morning, if I exclude the vast amount of advertising and pathological fake news and focus on actual local coverage, in my hometown the local electronics recycling program is temporarily moving because of road construction, and three miles across town the police have reported three recent delivery package thefts. How would either story influence me being more or less likely to vote for Trump in 2020? There's been an intense cultural shift towards not making informed decisions in the voting booth; one MUST either vote along demographic identity lines or optionally follow groupthink or keep very, very quiet lest suffer possibly violent consequences. If those cultural trends change, then there would be motivation for informed voting. However, "everyone in charge" at this time likes the system and its a disinformation to pretend informed voting is relevant at this time. The problem at this time isn't "voter education" but "conform to your group or be punished".
- jcranberry 7y ago
  Maybe all solely news media companies should be non-profits. Current incentives have led the news media to churnalism, sensationalism, and the near extinction of long form journalism.
  - abawany 7y ago
    I agree about churnalism but do you really want your tax dollars to pay for "The Enquirer"? Cause you know they will get classified as a "newspaper".
    - eru 7y ago
      And arguably they provide more useful news for most people than 'serious' newspapers that get you the latest political outrage.
witherk 7y ago
I don't think influencing the media should be tax deductible. On the other hand,it does seem like the autotrophs of the journalism ecosystem are dying off pretty quickly and something has to be done.
conanbatt 7y ago
Why? Now the newspaper is conditioned by the government.
- Dylan16807 7y ago
  So is every business.
  - conanbatt 7y ago
    Then lets make everyone a non-profit for tax purposes, since its the same.
    - joshuaissac 7y ago
      How is it the same? The newspaper is an actual non-profit (the shareholders had to give up control to get the status) but what you seem to be suggesting is to give for-profit businesses non-profit status for tax purposes even when they are not actually non-profit organisations. Or do you mean that businesses should be able to convert to non-profit organisations when the business is no longer viable? I can agree with that sentiment. If the shareholders are prepared to give up control, and the creditors are paid off, it would be great if businesses converted to tax-exempt non-profits instead of going bust entirely.
      - conanbatt 7y ago
        Previous poster implied that all businesses are influenced by government so the non-profit status does not have additional bindings. I answered that if all businesses are regulated by government regardless, why collect taxes at all, since they are all extensions of government willpower.
        Dylan16807 7y ago
        The reason the government collects taxes is to make money, not to extend willpower to the businesses it taxes. The extra influence for non-profits is a side effect and not very large compared to baseline laws. It's not a goal, and it wouldn't make up for the loss of revenue; it serves a much smaller and completely different purpose.
cdolan 7y ago
Not to the same scale of Amazon, but UPMC (Pittsburgh’s regional medical giant) is a non profit who made $400 million profit a few years ago to some outrage. Their CEO is a pretty high flying guy for being a non profit! Suspiciously they made near zero profit the next year.
- Shivetya 7y ago
  non profit doesn't mean the executive level goes without, charities are infamous in this regard. that colleges can hide their endowments behind similar is just more proof we have a tax system designed to benefit the few and not the many I have no issue with local papers going non profit, however the idea they can do it any not cross into the political side is going to be a stretch. either from the weight given to certain stories, selection of letters to editors, down to opinion pieces, there are many ways to skirt the rules
Someone1234 7y ago
Congress should bring back the "FCC fairness doctrine"[0] and tie it into tax deductible for news outlets. If you're willing to be an unbiased source for news, you get tax benefits, if you want to be partisan you're a private company. [0] https://en.wikipedia.org/wiki/FCC_fairness_doctrine https://en.wikipedia.org/wiki/FCC_fairness_doctrine
- dmix 7y ago
  We have a news company called CBC here in Canada that is supported by tax payers and is supposed to be politically neutral but everyone knows its a left-wing partisan news source. It's just the nature of the business (ie, editors/writers/university english depts tend to be left leaning and then fill the news room with like minded people, with maybe one token conservative guy like NYT does) and even more so when its existence becomes tied to government spending and policy. Not to mention how hysterical and FUD-filled politics has gotten recently I'm highly skeptical that anything non-partisan wing will be tolerated.
  - abawany 7y ago
    You know, I disagree about CBC. I get its newsletters, the daily Alexa bcast, and see its YT videos. From my US-based perspective, it seems that they went well out of their way to be balanced in their coverage. They could have buried SNC Lavelin but it was amazing how long they kept up coverage. Their YT channel had daily "Scheer campaign day X" but I didn't see the corresponding videos for Trudeau.
    - dmix 7y ago
      The mistake people always make is assuming left wing partisan = blind support for Trudeau/liberal party. Which is not what that means. The CBC isn't being accused of being a propaganda arm for a particular party. Not is it not about just blatantly supporting a single centre-left political party. The biases are about ideologies and how idea/stories/people are presented, spun, or casually dismissed in general. A big one is what sources are used. Additionally, even shamelessly partisan rags like WaPo or Vox would be critical of obvious democrat mistakes too. The bar isn't that low yet where something like SNC wouldn't be covered. It's often in the details and the stuff not said or treat uncritically.
abawany 7y ago
(Not trying to virtue signal) I pay for my news subscriptions and really think that is worth doing but I don't agree that news should be tax deductible for the following reasons: * We already have enough tax loopholes. * The definition of "newspaper" is going to get pretty ridiculous fast with this loophole. Do you want your tax dollars to support Goop Weekly? Maybe (I don't know you after all), but I certainly and vehemently do not.

yoelo 7y ago

The requirement of 401c(3)s to be "non-political" looks like a pretty weird to someone that doesn't live in the US. Why do non-profits have to work with that suppression while for-profit companies won't? Does anyone here know the historical context for this?

jacquesl 7y ago
Good question. It sounds strange to me too. I wonder if there’s some unintuitive loophole like the paper itself doesn’t write political articles and sources them from other places.
- garmaine 7y ago
  No, it's just what a 501(c)(3) is: a religious, charitable, scientific, literary, or educational organization, or a handful of other more specialized causes. Note that like a corporation, a 501(c)(3) is allowed to spend a portion of its funds on lobbying, it just can't be the prime focus. There are other non-profit organization types that are specifically suited for political action. Labor unions are 501(c)(5) and often very political. But most political organizations are regulated under section 527 of the code. The reason is simple: different codes require different reporting requirements. The 501 codes are heavily scrutinized by the IRS to make sure they are legitimate charitable causes. 527 orgs are overseen by the FEC to make sure that they obey political campaign financing laws. The reporting requirements for both are different.
- ghaff 7y ago
  501(c)(3)s can write political articles. They just can't engage in overt political activity. For example, my understanding is that a non-profit shouldn't endorse a candidate and certainly shouldn't make political donations or otherwise actively participate in a political campaign. They're not prohibited from covering a campaign or writing about proposed legislation though.
miiiiiike 7y ago
Political Campaign Activities - Risks to Tax-Exempt Status: https://www.councilofnonprofits.org/tools-resources/political-campaign-activities-risks-tax-exempt-status https://www.councilofnonprofits.org/tools-resources/politica...

grubb 7y ago

Just my two cents: I grew up in Utah and did my undergraduate degree there. The Salt Lake Tribune is a great newspaper (I subscribed while living in the state) and it has been rough watching them downsize and lose some great staff over recent years. I am very much of the opinion that good local journalism is a necessity for holding people accountable. For example: the work the Salt Lake Tribune received a Pulitzer for [0]. Anything to help good local journalism continue and survive is nothing but a win in my view. [0] https://www.sltrib.com/news/2017/05/07/salt-lake-tribune-wins-pulitzer-for-campus-rape-coverage-praises-victims-for-sharing-their-stories/ https://www.sltrib.com/news/2017/05/07/salt-lake-tribune-win...

NorthOf33rd 7y ago
I’m still here and this is incredibly important for our community. The tribune is the only major news outlet not owned by the LDS church, and is an important tempering force. Over the years they’ve given up some of their autonomy due to joint operating agreements with LDS Church owned Desert News, but without them salt lake would be a large metro without a non-church controlled newspaper. Which is really strange to write down. Salt lake looks poised to elect its first LDS mayor in something like 50 years today which I think speaks volumes to the weakening of slc secular news sources. One could argue that it’s due to the modernization of the church on some key issues, but based on the coverage of the candidates, I’m not so sure. On a national scale, I’m really hopeful this trend continues. Newspapers do incredibly important work on “boring” local issues that no one else is able to do.
- catacombs 7y ago
  > The tribune is the only major news outlet not owned by the LDS church, and is an important tempering force. In Utah. Let's make sure that distinction is clear.
  - briankelly 7y ago
    That was plenty clear from the context.
  - 7y ago

coldtea 7y ago

How is that strange? All kinds of media are/can be nonprofit where I am from...

tomhoward 7y ago
It’s unusual for a for-profit corporation to switch to a non-profit. Other U.S. media orgs like PBS are non-profit, but have been that way from the start.
perl4ever 7y ago
Well, we don't do it that way in the dystopian US of the 21st century. Disregarding obscure organizations like the Associated Press, there are only about 172 nonprofit news outlets[1] founded in the last 30 years or so! The concept is practically unheard of. [1]https://en.wikipedia.org/wiki/Non-profit_journalism https://en.wikipedia.org/wiki/Non-profit_journalism
- coldtea 7y ago
  Not sure if ironic. 172 is definitely on the low numbers for a country of 350M -- especially with 50 states that could have their own local news non-profits (tv, radios, newspapers, online version of the latter two, etc).
  - vonmoltke 7y ago
    The study had a relatively narrow definition of what counted: https://www.journalism.org/2013/06/10/methodology-30/ https://www.journalism.org/2013/06/10/methodology-30/ Summary: > Outlets must be domestic. > Outlets must be active, though they do not need to be publishing new content on a regular basis to be included in the study. > Outlets must be young. > Outlets must be primarily digital. > Outlets must produce original reporting. > Outlets sponsored by an institution must produce journalism that focuses beyond its own walls. "Young" and "primarily digital" are the biggest restrictions.
  - perl4ever 7y ago
    Only 30-50 people die from dog bites in the US per year. That's an average of one or less per state! Does that mean "dog bites man" is news, too? Also, your tone suggests you're ignoring the word "founded".

Illniyar 7y ago

What is a "legacy newspaper"? Is it just a newspaper?

tomhoward 7y ago
“Legacy” just means old or traditional or hailing from a past era, as distinct from publications that have been newly developed in recent times for modern markets and technologies. It’s also distinct from established media orgs like PBS that have been nonprofit from the start.

elcapitan 7y ago

Time for Bezos to register the Washington Post as nonprofit and make Amazon a subcompany.

mieseratte 7y ago
Exactly my thought! This has "tax loophole" written all over it. Company gets to subsidize favorable propaganda, while at the same time getting a nice tax write-off. Edit: For those downvoting, would you care to elaborate? I don't see how this won't be abused. What am I wrong about here?
- not_a_cop75 7y ago
  I'm sure having one of the most powerful men in the world run a newspaper is going to produce unbiased journalism.
- cartoonworld 7y ago
  I would imagine a non-profit isn't able to well.... profit as much. And if I know one thing it is that a rich guy loves his money as much as a preacher loves the Lord.
  - jtbayly 7y ago
    Non-profits are allowed to profit all they want. The NFL is a non-profit org.
    - lostapathy 7y ago
      The league is - the teams are not.
      - jtbayly 7y ago
        That's what I meant. Apparently it changed. But so what? The league itself made enough money to pay Roger Goodell $44M in 2013. As a non-profit.

jonny383 7y ago

Great - the IRS is now giving tax-free status to the mormon church's for-profit arms.

richeyrw 7y ago
You understand that the Salt Lake Tribune has traditionally been dedicated to being critical of the Mormon church? Right?
- NorthOf33rd 7y ago
  They lost some of their teeth after the joint publishing agreement with Deseret News, but other than npr they are the only major news outlet of any medium in salt lake that is willing to be critical of the church. And it’s not like KUER has much airtime devoted to local news.

corodra 7y ago

I'm going to push away the dubiousness due to the LDS issue and I'm going to assume that the SLT is a good newspaper in the following comment. To be forthright in my bias, my general views on Utah are not that great though... stemming from their stupid fucking criss-crossing streets and over usage of concrete barriers in the middle of the road all the fucking time. Cough, excuse me. I'm really curious about the repercussions of this. If this works out decently for them, I'm pretty sure other news outlets of all shapes and sizes will follow in the next few years. Maybe this is good. There's a potential here to revitalize the news system in general. They won't be so dependent on pandering to a select few corporations and bullshit advertising methods. Maybe this will bring some more unbiased... wait, no probably not. Not being funny, that just made me realize the folly. If donations are going to be a big play, the only way to really get good donations is to appease a certain viewpoint. I don't know... maybe there's a way to mitigate that? It does say no more political endorsements... eh... I doubt that'll happen. I was hoping to have a good, happy train of thought on this one. Then I remembered that all humans are assholes. Fucking hate driving in Godless wasteland of a state.

AnimalMuppet 7y ago
Criss-crossing streets? You mean, a grid system? What's so bad about that?
- corodra 7y ago
  Yea grid roads are unique to only utah... seriously? Continously flow intersections and diverging continuous intersections. You end up driving on the left hand side and drive all wonky. Its terrifying to encounter the first time and makes no logical sense. They brought it to colorado springs and it's so amazingly pointless.
  - AnimalMuppet 7y ago
    Oh, those. Yeah, those are annoying. There aren't that many of them, though.
  - catalogia 7y ago

calderarrow 7y ago

One of the subtle considerations when discussing non-profits is that any organization can be a non-profit, but in order to get tax exemption you have to meet certain requirements related to your mission and how your organization is organized [0]. One of the exempt requirements is education, and there are numerous ways in which it could be argued that a local news outlet can operate as a medium for educating local constituents of important events. I spent a number of years working in public accounting in the DC area, almost exclusively with non-profit organizations on both the audit and tax side. Tax exempt organizations come under a fair amount of scrutiny, because of how valuable their tax exemption status is, and the government checks everything from executive compensation to programatic expenditures. Most have to get audited annually, and you can read their audited financial statements just like how you could read Apple's or Google's [1]. A key note about tax exempt organizations is that as soon as they start to earn income from activities that compete with typical for-profit organizations, they have to pay corporate taxes on that income. I saw some people implying that Amazon could become a subcompany of WaPo and avoid taxes, which, while technically is in the realm of possibility, would have 3 major consequences: firstly, the 501(c)3 non-profit parent organization can't make dividend-like disbursements to shareholders, so the money would be tied up in the non-profit, secondly, excessive compensation to employees could result in massive punitive taxes [2], and thirdly, the revenue that WaPo would receive would most likely be taxable unrelated business income. Bezos would be better off keeping Amazon separate and donating cash to WaPo -- at least then he'd be able to get a write off. [0] irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3 [1] There are several sites, but guidestar.org is the one I've mostly used. [2] irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions

frankydp 7y ago

It is my opinion that in order to retain freedom of the press protections an organization should be required to be non-profit, not specifically 501c3 of course.

mieseratte 7y ago
What would that solve, specifically?
TallGuyShort 7y ago
Having a non-profit tax status doesn't prevent you from paying large salaries if you make more money. That really wouldn't do anything to take away the incentive the press has to sell more news.

NoblePublius 7y ago

Why doesn’t Bezos do this to the Amazon Post?

equivocates 7y ago

The Texas Tribune is a non-profit[1] and has been so for 10 years.[2] [1]: https://www.texastribune.org/about/ https://www.texastribune.org/about/ [2]: https://www.texastribune.org/series/10th-anniversary/ https://www.texastribune.org/series/10th-anniversary/

chrispeel 7y ago
The Texas Tribune appears to have been created in 2009 as a non-profit. In contrast, the Salt Lake Tribune was founded in 1868, and has been for-profit until now. I believe the unique thing about the SL Trib is its transition from for-profit to non-profit. [1] https://en.wikipedia.org/wiki/The_Texas_Tribune https://en.wikipedia.org/wiki/The_Texas_Tribune [2] https://en.wikipedia.org/wiki/The_Salt_Lake_Tribune https://en.wikipedia.org/wiki/The_Salt_Lake_Tribune

zacharytelschow 7y ago

Plenty of newspapers have been unprofitable for a long time. Oh wait... Headline was slightly different ;)

rolltiide 7y ago

the thing that sucks about 501(c)3 is that there are no deductible expenses any more So they can be used in conjunction with other entities to really amplify the tax benefits If you think of them like 401k on steroids It can help, as deductible contributions are unlimited up to 50% income and anything above that rolls over into the next year, and you can do a bunch with asset prices and velocity. Different parts of the tax code pull deductions before or after AGI, so you can game this forever all while the masses can only express their discontent by targeting “income tax rates” and the edgiest of them all says “marginal income tax rates”