Tax Proposed on Social Media Ads to Fund Endangered Local Journalism

Interview with Timothy Karr, senior director of strategy and communications with the group Free Press, conducted by Scott Harris

Over the last 15 years, the U.S. media landscape has changed dramatically, with according to a 2018 study.
Twenty percent of the nation’s newspapers have closed down since 2004, leaving 900 communities without local news resources. Another recent survey conducted by the Pew Research Center found that between 2003 and 2014, the number of full-time newspaper reporters covering statehouses in the United States fell by 35 percent.
These disturbing numbers cited in a recent proposal from the media democracy group Free Press provides the rationale for a new initiative to address the decline in U.S. journalism. In a paper co-written by Free Press journalists Timothy Karr and Craig Aaron titled, “Beyond Fixing Facebook,” the group proposes the imposition of a new “tax on targeted ads to fund civic-minded journalism.”
Between The Lines’ Scott Harris spoke with Tim Karr, Free Press senior director of strategy and communications, who describes the decline in U.S. journalism, its impact on a functioning democracy and how the proposed tax on major social media company’s targeted ads could strengthen locally-owned, independent media outlets.

TIM KARR: News organizations have been bleeding reporters for the last couple of decades and a lot of the initial decline was really due to their own mismanagement. And this trend that we’ve seen over the years towards media consolidation where you have one company owning several television stations, like Sinclair. Or you have one company owning several newspapers like Tribune Media, at one point. And what happens when this industry consolidates in this way? They like to use these terms of like “synergies” and things like that that would result from these mergers. But what synergies really means in the real world has been journalism layoffs.

But in the last 10 years, we’ve seen also this transformation of the media economy. Commercial journalism was powered by advertising, whether it be print advertising or radio and television advertising – that was the money that supported reporters and kept many of them on the beat for quite some time.

In the last 10 years, that whole model has changed to online advertising. Online advertising is really controlled these days by just two companies. Facebook and Google control 70 percent of online advertising in the United States. But these two companies are not news organizations. They don’t support journalists. They don’t hire. They don’t have newsrooms. They don’t hire journalists. They don’t have news producers.

So you’ve seen the siphoning of money away from a media economy that used to support journalism towards one where journalism is not. That has been factored out. And to add to that problem, we’ve also seen, and we’ve learned a lot in the last year, social networks like Facebook and Twitter and even Google expedite the spread of misinformation. We learned about Cambridge Analytica last year, which is a data firm that used Facebook data to misinform voters about the U.S. election, about the Brexit elections in the U.K. So not only are we losing journalists, we’re also seeing the increased speed of the spread of information around the world. So it’s become this sort of perfect storm. And, that’s why we have put forth this paper that I hope to talk about a little more.

BETWEEN THE LINES: Tim, lay out for our audience your proposal to impose a tax on targeted advertisements to fund what you term civic- minded journalism.

TIM KARR: Well, because there is this great imbalance in the media economy these days and because we’ve seen the spread of misinformation do harmful things in democratic society – it’s also fomented hatred and violence in other parts of the world – we have proposed a tax on the economy behind online platforms that really drives a lot of the Silicon Valley companies. And a tax of, for example, 2 percent in the United States would generate nearly $2 billion. And we’ve proposed creating what’s called the Public Interest Media Endowment where that money would go and it would be similar in some ways to the Corporation for Public Broadcasting in that it’s a quasi-governmental organization that then distributes that money to the sort of local investigative, civic-minded journalism that we hope to see more of a lot of the local journalism that we’ve lost over the last two decades.

BETWEEN THE LINES: Now explain to our audience a bit about the Public Interest Media Endowment that you envision and how that entity would allocate funds.

TIM KARR: Well, I mean, we’ve been thinking about this for a number of years now and we’ve actually had some success on a very local level. Over the last couple years, we’ve been working in the state of New Jersey to create what’s called the Civic Information Consortium. And as a result of money that New Jersey made from the sell-off of public media television station licenses, we’ve created this fund for the state of New Jersey and it starts with just $5 million. We’re hoping to raise more money for it from the state coffers that goes towards supporting local journalism. And as we’ve worked on that, we thought, well, we could scale this to a national model.

A carbon tax is used by many countries to tax energy companies that are emitting dangerous emissions into the air and that money is then used to clean up the mess they’ve made. Well, this is like a carbon tax in that we’re taxing these social media companies to help clean up the mess they’ve made. And the best way to do that is to fund the antidote. The antidote to misinformation is good, local journalism. Good investigative journalism, civic engagement projects. So that’s, that’s basically how we created the structure.

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