Want to sell more papers? Make your paper useful!

Quick note, I'll post a better and more complete article some time in the near future on Medium.

Newspaper circulation has fallen to, well, let's be honest, pathetic levels over the course of the past few decades. When I was a kid, the nation's newspapers sold some 60,000,000 copies weekdays, and that was when the population of the United States was just 180,000,000. That's one newspaper for every three people, including old folks, little kids, multiple adults in each household. Today, daily circulation is more like 20,000,000, with a population of 330,000,000. That means circulation is only a third of what it used to be, while the population has nearly doubled.

I'll save you the math -- for every 6 people who used to read the newspaper when John Kennedy was the new President, when they could get their news from the television and from radio (sounds wierd now, but it was a real thing then), only 1 person bothers to buy a paper today. If you're in the business of selling newspapers, that puts you in the same league as people who sell horse saddles and barrel hoops. Still around, but not worth a whole lot.

Anyone who cares about newspapers at all already knows this. It's nothing new. It's not news.

How did things get this way? And is there any way the situation could be turned around?

Conventional thought that I see expressed is that people don't like to read, that they have no patience for the lengthy articles in the newspaper, that they don't like to think deep thoughts, and so the vast majority of the simple-minded, lazy members of the general public get their news from television, from web sites or from social media. Easy sources of snippets of information dumbed down and chopped up into tiny snippets people are willing and able to glance at while they go about whatever else they're doing.

Lots of highly-credentialed and well-respected people believe this. I respectfully disagree. It's nonsense, it's the product of lazy minds mired in muddy ruts of stale thought. Respectfully.

Newspaper circulation has fallen because they have treated the news as a form of entertainment. If it bleeds, it leads. Crime. Corruption. Gossip. Sports and recipes. So what.

People pay for things they find of value, and they pay fair price for the value they perceive in what they want to buy. They don't find anything of particular value in the newspaper, so they don't buy it.

If you want to sell newspapers, you need to provide value, value in the eyes of the people you want to buy your newspaper. You need to provide a service, make yourself useful, and useful in a way that people will pay for.

It's actually fairly easy to say what, in concept, would be of value to the public: solid coverage of all the things people need to know about because of it's impact on their lives, presented in a way that is thorough, meaningful, useful, relevant and timely -- particularly 'timely.' That means coverage about things on a routine, predictable basis that lets people see potential problems when they can be dealt with calmly and intelligently, not after they've already exploded in your face.

And thoroughly. That means you find out everything that a person needs to know about a situation, not just what is exciting, or controversial, or that someone is making a fuss about, but also the odd and crazy things that flow into it or and tied to it, the direct and indirect effects it can have, all the people whose lives are impacted by it, in one way or another. It means your coverage is not glancing over some things while obsessing over others. It means your newspaper is motivated by the concern that you may be missing something important that people need to know, and not just what happens to support some agenda or undercut another, even if the one agenda is good and the other evil.

If you can't depend on your newspaper to get you everything you need to know, then you're left with whoever you happen to talk to, or whatever other place you go to find out what's up. The reality is that most of the time, you're going to people who don't know any more than you do, or people who think the way you think. You're getting only a slide of the world, not the whole thing.

So, where's the value in the newspaper? Why bother? Does it tell you anything you really need to know in order to make decisions? To fix a problem before it becomes a disaster? To know what your government is doing -- other than gossip and slander and puffing about superficial political nonsense?

People pay good money all the time for things they find useful. They're not buying newspapers. That should tell you something.

The Supreme Court and Sales Tax -- Issue a Decision but Miss the Real Issue

July, 2018: The story was big on all the news programs as soon as the Supreme Court released its opinion: states can collect sales tax from online purchases! And like usual with Supreme Court decisions, the decision was reduced to a question of winners (brick-and-mortar stores) and losers (web-based stores).

But there is more to what the Court decided than who won or lost as a result of the decision, and there is even more to the decision than what the Court itself considered.

The case was South Dakota vs. Wayfair, Inc., and the big news was that a majority of the Justices decided that states have the authority to tax sales transactions conducted over the internet between state residents and out-of-state sellers. This reversed a 1992 decision, Quill Corp. vs. North Dakota, in which a majority of the Court held that a state could not tax transactions with sellers that have no physical presence in that state.

Like many other decisions the Court has made over the past two hundred odd years, though, the decision reaches firm conclusions without ever actually showing that the Justices actually understood what issues they were dealing with.

First of all, you need to understand that the label “sales tax” is a misnomer. It’s actually a “purchase tax,” assessed against the buyer and collected by the seller as the state’s fiduciary, or agent. It’s no better when it’s called a “use tax,” assessed against the buyer and payable by the buyer directly to the state.

The point it, it’s not a tax on the seller. It’s not payable by the seller. The sales tax money collected by the seller is never the seller’s money. The money the buyer pays to the seller for whatever was bought and sold has nothing to do with the sales tax money — other than to determine exactly how large the tax is that the buyer must pay for the transaction.

Why is this important? Because you need to understand that sales taxes are imposed on the purchaser, not the seller, and the seller collects the tax on behalf of the state, it does not pay it out of its own funds. The seller acts as an agent of the state. Sellers must register with the state in order to collect sales tax, since they are acting as an agent of the state.

To put it a different way, a state can require buyers to pay a tax, require sellers to collect the tax, and prohibit anyone from selling taxable goods or services unless they first register and get a state license to do so. If you do not get your sales tax license, you can’t sell anything a buyer would need to pay sales tax on.

There are many, many aspects to business, sales, delivery, contracts and so on to complicate matters. Indeed, the Justices themselves argue in dissents and concurrent opinions about such things, and how different decisions from the Court seem to pull the Constitution itself one way or another on how they should decide the case.

But when you cut through all the intellectual bramble, you’re left with a few fundamental issues that someone — probably Congress — needs to think through carefully and make some well-grounded decisions.

First, can one state force people in every other state to obey its laws? The Supreme Court seems to think so, at the moment, with regard to forcing sellers to collect sales tax on goods and services sent elsewhere. So, if I’m in Delaware, with no sales tax, South Dakota can force me to get a license to collect sales taxes on whatever I may deliver to someone in South Dakota, and to file sales tax records in Pierre along with a check for whatever amount I may have collected. And South Dakota can presumably audit my books and tell me I have to come on up there to talk to its tax department if they don’t like what they see. Same with Hawaii and Alaska (for the communities that have a sales tax), Minnesota and Texas.

This would be different, at least for most people on a practical scale. I live in New York, which has an income tax. If I go to Florida, which has no personal income tax, and take a summer job, I know I’ll need to pay New York income tax on what I earn in Florida — but can New York require the Florida employer to withhold New York taxes from my pay while I’m there? Should it be the call of the New York legislature whether the Florida employer should have to? Could New York prohibit employers in Florida from hiring anyone from New York if they didn’t agree to withhold New York taxes?

Second, sales taxes are anything but simple. What’s subject to tax is not always clear, even in the place where you live. Groceries and medications are often exempt — but what about nutritional supplements? Snack food? There can be carve-outs for things like clothing — up to a certain value, on specific dates or for limited periods of time. Cities and counties may have their own add-on rate — and you don’t necessarily know where a person lives just by looking at their zip code. If you’re the Delaware seller, how comfortable are you with exposing your business to the exact details of South Dakota’s sales tax practices? Or with paying someone else to tell you what’s going on in each and every jurisdiction you may get a customer from?

Third, there are costs involved in registering as a sales tax agent in even one state, much less the 45 states that have a sales tax. Each has its rules on what I need to do, including requirements and prohibitions like posting the license on the wall of my place of business. Lots of wall space for 45 certificates, eh? And if I’m a small business, a start-up selling socks on-line, for example, or a free-lance writer peddling my self-published books, how am I supposed to get all these licenses? Spend a week or two getting forms from all over, filling them out and waiting to see whether I filed them correctly? Pay some on-line law firm to do the work for me? How much work will I need to put into making sure I collect the correct amount of sales tax on each sale? Keeping records for each state, even if I don’t hit the floor set by one or another for collecting its sales tax? Tracking what rules I need to comply with, right now, next year, last year?

Fourth, what impact is there on interstate commerce if businesses are forced to decide whether to get properly registered and licensed to collect sales tax in states where they do not have a physical presence, or to avoid making any sales to any resident of a state which has not licensed them? None? Some? Depends? A majority of the Justices currently on the Supreme Court seem to think not — I should think otherwise (but that’s just me!).

The Court has stated repeatedly that Congress could solve this problem by exercise of its plenary power to regulate interstate commerce, but I don’t believe that to be the case. If the federal government has no authority to make state or local government enforce its laws, how can it claim authority to make state governments enforce other states’ laws?

Congress could, I suppose, impose its own sales tax, distributing the net proceeds to state governments according to some formula, like total income of all state residents, etc. In order to avoid double taxation, it could limit participation to states that eliminate their own sales tax. There are potential nightmares of epic proportions flowing from this kind of program, but it would be clearly within the authority of Congress to impose taxes and to spend money as it sees fit.

Or, states depending on sales taxes could turn to other ways to fund their operations. A sales tax is about the simplest kind of tax a government can impose, to be sure, in terms of administration for the government and of execution on the part of the people who pay it, collect it and send it along to the state. This makes it easier than income taxes, with all the forms to deal with all the rules dealing with all the complexities of finance in the modern world, or even property taxes, which are based on values of property that are anything but easy to ascertain or maintain.

But sales can be regressive, imposing more of a burden on the poor than on the wealthy. This burden can be shifted a bit, by exempting food, medicine, clothing and housing from the list of taxable sales, things that may well make up more of what people buy when they don’t have much money to spare on other things — like cell phone, telecommunications, transportation, entertainment, and so on, things that are actually necessities for everyone in the modern world.

No matter the wisdom or error in the Court’s analysis of the problem set, legislators and the public that elect them really need to put a lot of thought into these fundamental issues, evaluate them from many perspectives, and decide on actions that will make things as fair and reasonable as possible in the world we now live in.

Thoughts?

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