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The House version of the Build Back Better Act contains a provision that news media advocates have sought for years. It’s a payroll tax credit that supports local news organizations for employing journalists. The Joint Committee on Taxation pegs it at $1.67 billion over 10 years.
The provision “would provide a credit up to $25,000 to defray employment taxes in the first year, and $15,000 in the next four years, for each employee,” Deadline’s Ted Johnson reported Thursday. “That would cover 50% of compensation up to $50,000 in the first year and 30% in the next four years.” Thus, it would incentivize some publishers to hire or retain local reporters.
Earlier bipartisan proposals to prop up flailing local news outlets included other initiatives like tax credits for advertisers. But the payroll tax credit seems to be the key part that will cross the legislative finish line.
Even this provision has been touch-and-go: It was briefly dropped from the House bill earlier this week, advocates said. But then it was restored, and “industry experts credit a push from news publishers and owners,” Poynter’s Rick Edmonds wrote Thursday.
Edmonds noted that “the measure still needs to win inclusion in the Senate’s version and survive any further reduction of the $1.75 trillion target total. Still, the move represents a big improvement in prospects for the subsidy.”
A “huge breakthrough for local news”
Some conservative outlets have tried to trash the tax incentive as a “media bailout” that will “compound the suspicion of bias.” Donald Trump turned it into a new talking point for press bashing in October, claiming the Democrats are plotting a “$1.3 billion payoff to the fake news industry.”
But the struggles of local news are undeniable. And the proposal seems to be moving forward.
“It’s a huge breakthrough for local news if it becomes law,” Report for America co-founder Steven Waldman, who has helped lead the drive for the tax credit, told me on Thursday. “This approach is a simple, content neutral, non partisan, First Amendment friendly way to save local news. It’s focused on the core problem — that the collapse of the business models have led to a shortage of local reporters. This focuses on helping newsrooms to retain or hire local journalists.”