Facebook and Google's move to deliver ads to users won't stop, and advertisers won't be able to give up platforms with such high conversion rates.So can a tax on the platform's high advertising revenue feed journalism?This issue of All Media (ID:quanmeipai) compiles articles from neiman's news lab to analyze whether this wave is feasible.

Taxes feed journalism

Free Press, an independent organization, recently published a new article suggesting that advertising taxes should be used to develop high-quality journalism.This article thinksThe move could provide a glimmer of hope for media caught up in the fake news crisis.Free Press Senior Director of Strategy Timothy Karr and CEO Craig Aaron wrote,Governments should tax advertising in a targeted way to support the development of diverse, non-commercial independent local media and invest in new news distribution channels.

The platform is strong

A recent eMarketer report predicted that in 2019, digital advertising would surpass traditional advertising share, including television, radio and newspapers.Google, Facebook and up-and-comer Amazon will share a staggering $129 billion in digital advertising budgets.

Technology companies have benefited from advertising revenues, but their tax revenues are simply not worth mentioning.From 2007 to 2015, the dominance of several technology companies was established, but the corporate income tax they paid did not make the big difference in total taxes , with Facebook accounting for only 4 per cent, Amazon 13 per cent and Google 16 per cent, according to Free Press.

The financial situation of the media is in dire doubt

In stark contrast, the financial situation of the media is stark.In the 20th century, the news industry flourished, relying mainly on advertising revenue, and in the digital age, some media tried to convert the traditional advertising model to digital advertising, and tried to guide the flow through the platform, which also produced some low-quality headline party articles.Free Press likens their claims to a "carbon tax" imposed by countries such as Canada, which impose such taxes on the petrochemical industry to help tackle pollution.The government should therefore implement similar measures to the advertising industry to offset the "speech pollution" generated by the platform for traffic.

In the United States, policies to tax products such as gasoline, cigarettes or lottery tickets abound because the consumption of these products may harm third parties other than consumers, and the resulting tax revenues can finance public health care, infrastructure, education, and social welfare systems.Unlike the product consumption tax,Targeted taxes on advertising are not directed at individual consumers, but at the companies that profit from them.Advertising tax revenue can be invested in the creation of a public welfare fund for the news industry, supporting the production and distribution of content in different media, with a focus on local news, investigative reporting, media literacy, non-commercial social networking, civic science and technology projects and community information projects.

Detailed scenarios

Free Press not only sets out ideas, but also offers three tax options:

Option 1:A 2 percent digital advertising tax is levied on all Internet companies with annual digital advertising revenues of more than $200 million, which could reach at least $1.8 billion based on advertising sales over 218 years.Commercial online media and platforms with digital advertising revenue of less than $200 million will not be taxed to discourage smaller internet companies, especially online media.

Option 2:A lower tax rate would tax advertising revenue for all businesses, including offline advertising.U.S. offline advertising revenue is expected to reach $200 billion in 2018, generating $2 billion in revenue even with a 1 percent tax.

Option 3:Tax all large businesses that are taxable for more than $1 million a year.If more than 60 per cent of these businesses' income comes from advertising, they pay taxes at a rate of 1.5 per cent.Based on 2018 U.S. advertising data, the plan could generate nearly $2 billion in tax revenue.

"If we don't do something about it, the ecology of journalism will only get worse," Free Press wrote."The platform already controls everything that the user can access and is profitable from the user's attention.This crazy pursuit of clicks has hurt a lot of media, directly affecting the way news is edited and the quality of content.The bell also has to be ringer, for this situation, the best solution is to let the originator take responsibility.

Emily Bell of Columbia News has previously called for wealth to flow from Silicon Valley to independent media."The big five technology companies could set up a endowment fund to support the development of independent media.Free Press also stressed that the platform's current content control measures are not the solution, through the establishment of public welfare funds to support the development of local start-up media, investigative media and other public media organizations is a truly effective solution.