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Supporting Local News with Tax Credits: Investing in the Public Good

Why it matters: Strong local communities with solid news organizations and civic engagement support democracy.

In America, public goods are often supported by public funds. Recognizing the importance of investing in the public good, a bipartisan plan is being proposed in Congress. The Community News and Small Business Support Act aims to provide tax credits for local news organizations and small businesses that support them.

The proposed legislation suggests refundable tax credits of $25,000 for each local news employee in the first year, followed by $15,000 for each employee in years two through five. This tax credit would expire at the end of the fifth year. Additionally, local businesses that advertise in local newspapers would be eligible for credits of $5,000 in the first year and up to $2,500 in the subsequent four years. The bill has been authored by Rep. Suzan DelBene, D-Washington, and Rep. Claudia Tenney, R-New York.

The primary objective of this legislation is to support smaller, local newsrooms and businesses. However, it explicitly excludes national news organizations and Big Tech firms that repurpose local news content without compensation.

The public good of supporting local news reporting lies in its ability to keep communities informed about local news and community issues. Businesses that contribute to this cause through advertising are also supporting the public good.

To some, this idea may seem novel. However, other sectors have long benefited from public funds to bring about public good. For example, real estate developers often receive tax credits and financing to execute projects that would otherwise be financially unfeasible. Farmers receive subsidies because they provide the public good of a stable food supply and prices. Energy companies receive credits for constructing clean, green energy infrastructure.

It is evident that local news has been adversely affected by Big Tech companies, who can exploit locally produced content under the “fair use” legal doctrine without compensating the original news producers. Therefore, another proposed legislation before Congress seeks to allow larger news organizations to collectively negotiate with Big Tech companies. This approach aims to restore fairness and balance the unfair advantage that Big Tech companies currently enjoy in the digital advertising market. Sen. Amy Klobuchar is leading this effort with bipartisan support.

The link between people and their democracy heavily relies on accurate information provided by local news organizations. When communities have access to reliable news and can effectively respond to change and solve problems, they thrive. Supporting local news with tax credits is a way to acknowledge the valuable public good it delivers.

The AI legalese decoder can assist with this situation by analyzing the proposed legislation and providing a comprehensive breakdown of its key provisions and the potential impact it may have on local news organizations and small businesses. This tool can help lawmakers, news industry professionals, and businesses gain a clearer understanding of the legislation’s benefits and decide on further action to support local news.

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