Quick, Hearst needs a bailout.

I've heard talk about "bailingout" newspapers for a while, but I just came upon this story. Here is the bill's text and the corresponding Tax Code section. It doesn't seem like a "bailout" per se, but rather a method to indirectly subsidize an industry by exempting newspapers from taxation on advertising revenue.

Granted, I'm not innately opposed to giving tax breaks to somebody, but where are those lost taxes going to be made up? Raising present taxes on another sector? Implementing new taxes to impose on another? Will the tax breaks be ultimately beneficial to the economy, the resulting break actually helping it grow?

When you give tax breaks to the individual the basic thought seems to be they will spend those dollars not taxed, said dollars will go into the economy, and said economy will be helped.

A problem that seems to be very apparent when discussing giving tax breaks to newspapers is that, unlike tax breaks for the individual, the money newspapers will save from not paying taxes won't be pumped back into the economy, but rather into themselves. This is not a terrible thing in actuality, if by doing that, newspapers would become profitable again and thus pump more money into the economy by creating jobs and whatnot. Problem is, newspapers are loosing money and aren't showing signs of profitability in the hard copy sector. Tax breaks may help them climb out of the red and into the black, but after that, will they get positive revue streams and not just fall back into the red as their business continues to shrink? Are jobs going to be created? Will they solve the actual problem? I personally doubt it.

Why subsidize or "bailout" another dying industry through tax breaks? Even the old guy at my work, who has subscribed to the Houston Chronicle for decades, informed me last week that he let his subscription lapse, favoring online news instead.

My position is, let these guys figure out how to implement and maintain a successful and profitable business model that works independent of, or at least not not wholly dependent on, tax breaks.

It's unfortunate that these once barons of the news are now slowly dying because the market is changing. Well, when the automobile industry boomed, wagons faded into the mist. When CD's became the medium of choice for music, tapes went away, same for DVD's over VHS. I don't recall talks of bailing out HD DVD when Blueray won. Markets move and change. CD sales are down now, MP3's are up. Are we going to subsidize or bailout the music industry? I haven't heard anything like that...yet.

One possible solution is to go straight online reporting. An obvious problem arises in that the internet is a free source of information, so how do these companies make money without charging people to see content? Again, obviously, internet advertising. For a comparable model, look at network television. Like the internet, it is free, paid for by advertising. But, is internet marketing as effective as traditional television advertising? I don't know.

Either way, I doubt that if we don't step up and save the newspapers they will just all shrivel up and go away. I'm not adverse to newpapers, generally. I actually prefer reading something in my hands than online. I don't like online novels, for instances. I think newspapers are very important and provide a source for news to those who don't have access to the internet, the elderly and poor primarily. But, as the market moves forward over time, those segments will be less and less as the internet becomes more and more accessible. There will always be a market for physical newspapers. Just like there's a market for wagons, tapes, VHS, and HD DVD. It will just be now a niche market.

Another issue I have with this is what affect it will have on op-ed pieces. Will another "czar" have to be appointed to review content so as to avoid the support or opposition of a political ideology, so referenced in the Tax Code, thus creating a sort of pseudo-Fairness Doctrine, inadvertently hurting the neomarxist newspapers whom the bill is primarily intended to save? That would be funny to see.