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Local News Coverage Is Declining — And That Could Be Bad For American Politics

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The laws of supply and demand aren’t working for local news.

The local news business was devastated by COVID-19, even though consumers wanted more of its product. Visits to local news websites spiked by 89 percent from February to March 2020, but newspapers did not profit from having more readers: Ad revenues for the largest newspaper publisher in the nation, Gannett, dropped 35 percent from 2019 to 2020. Journalists were laid off, furloughed or forced to accept early retirements or pay cuts.

The pandemic, however, merely accelerated a crisis in local journalism that is now at least two decades old. From 2000 to 2018, weekday newspaper circulation fell from 55.8 million households to an estimated 28.6 million; between 2008 and 2019, newsroom employment fell by 51 percent; and since 2004, more than 1,800 local newspapers have closed across the nation.

Perhaps even more alarming is that the public is largely unaware of this crisis. In late 2018, 71 percent of Americans told the Pew Research Center that their local news media was doing very or somewhat well financially, even though only 14 percent said they had paid for local news in the past year. But if local newspapers go away or are weakened beyond recognition, a real possibility given their steep decline and Americans’ lack of awareness of it, we won’t just feel nostalgic for them — we’ll feel actual consequences.

A growing body of research has found that government is worse off when local news suffers. In fact, inadequate local news has been linked to more corruption, less competitive elections, weaker municipal finances and a prevalence of party-line politicians who don’t bring benefits back to their districts. It’s not just government performance, however. My research with Matthew Hitt of Colorado State University and Johanna Dunaway of Texas A&M University shows that when local newspapers close, people don’t find another local option. Instead, they get their news from national outlets, and in the absence of local news, people are more likely to vote for one party up and down the ballot.1

What explains this change? Local political news offers Americans what political scientist Lilliana Mason calls a “cross-cutting identity” — or something that connects partisans on a different dimension instead of further dividing them along party lines. Put another way, when people read news about their neighborhoods, schools and municipal services, they think like locals. When they read about national political conflict, they think like partisans.

In our research we found that less local news meant more polarization. Then, with a little luck, we were also able to study the other side of the coin — whether more local news could actually bring people together.

In July 2019, Julie Makinen, the executive editor of The Desert Sun in Palm Springs, California, came up with her own experiment after reading our article: She decided to drop national politics from the opinion page for a month. Nothing on then-President Donald Trump, nothing on the Democratic presidential primaries — just op-eds and letters about California, Palm Springs and the surrounding Coachella Valley.

In our book about this experiment, we measured how banning national politics affected the topics on the opinion page and the attitudes of people in the Palm Springs area, and we found a dramatic change. Pieces about Trump dropped from one-third of all content to zero; mentions of political parties fell by more than half; and op-eds and letters about local issues like architectural preservation and traffic congestion increased.

This may sound trivial, but these were serious, contentious issues for the Palm Springs community at the time. One architectural landmark was at the center of a corruption scandal that culminated in an FBI raid on City Hall in 2015 and felony charges against the mayor at the time. Meanwhile, concern over traffic and the environmental impact from a plan to build a new downtown arena on the land of the Agua Caliente tribe spurred discussions on the city-tribe relationship.2 But importantly, these topics were not about Democrats and Republicans — they were about Palm Springs issues.

To measure whether this change in news coverage affected how people said they felt about members of the opposing political party, we fielded surveys in Palm Springs and Ventura — a city about 62 miles northwest of Los Angeles whose newspaper, the Ventura County Star, did not change its opinion section. According to our research, polarization slowed down in Palm Springs compared with Ventura, particularly among those who read the newspaper, know a lot about politics and participate in politics regularly.3 Polarization is a tough trend to slow down in American politics, but we found that The Desert Sun was able to do just that by changing one page of its paper per day. What’s more, per the paper’s internal tracking, online readership of opinion content nearly doubled during the local-only July.

The economics of local news makes experiments like The Desert Sun’s difficult to replicate, however. of the daily newspapers in circulation in the U.S. are owned by a private equity firm or hedge fund, which infamously cuts staff and other costs as much as possible. In 2020, even The Desert Sun lost its longtime opinion editor, Al Franco, who accepted a buyout from the newspaper’s owner, Gannett, along with hundreds of its other newspaper employees nationwide.

The market is simply not providing local newspapers the resources they need to deliver the civic benefits they’re capable of, which raises the question as to what extent the government should step in to help. People have long debated whether freedom of the press means freedom from government assistance, but on this point, history is clear: Government policies like tax breaks and exemptions from some labor laws and minimum wage and overtime rules have benefited newspapers since the 18th century. And as such, a bipartisan group of lawmakers is trying to find modern solutions to the local media industry’s current problems.

In March, Sens. Amy Klobuchar of Minnesota and John Kennedy of Louisiana co-sponsored the Journalism Competition and Preservation Act.4 This bill, if passed, would empower news organizations to collectively bargain with tech companies with the aim of helping smaller local publications earn back the much-needed online advertising dollars currently going to Facebook and Google. In fact, even bolder policies have been proposed to help local news, such as giving direct payments to news organizations to hire reporters or offering Americans vouchers to spend on local nonprofit media.

Ultimately, the stakes for local journalism are high. If the current bipartisan efforts to assist local news become defined along party lines and fail, future generations may not be able to depend on local news as we know it, and if our research is any indication, America’s political divides will continue to deepen as a result.

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Half of S&P 500 report more money for foreign taxes than U.S. taxes – CBS News

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Half of S&P 500 report more money for foreign taxes than U.S. taxes - CBS News

Nearly half of the large U.S. companies that make up the S&P 500-stock index set aside more money to pay foreign taxes in 2020 than they did for payments to the U.S. government — a lot more money. 

In all, 241 S&P 500 companies last year earmarked a combined $73 billion for taxes to foreign governments and just $6.7 billion to cover U.S. taxes, according to a CBS MoneyWatch analysis of the companies’ regulatory filings and data from financial information firm FactSet. That’s a foreign-to-domestic tax ratio of more than 10-to-1.

Globalization explains some of it. Coca-Cola and Caterpillar pay more tax overseas because they now make most of their money outside the U.S. Still others on the list, such Boeing, Hilton and Pfizer, saw the pandemic wipe away their U.S. profits — and all or much of their domestic tax bills.

But many of those 241 companies, such as FedEx, General Motors and Nike, made plenty of money last year, and plenty of it was made in the U.S. Nonetheless, the company filings suggest they now pay a majority of their taxes elsewhere. The relationship between where they make their profits and where they pay their taxes can seem particularly lopsided these days:

For decades, U.S. companies shrunk their tax bills by moving operations overseas, sometimes for legitimate business reason. But increasingly it is the U.S. portion of a global company’s operations that is getting the best tax treatment. 

One major reason for that, experts told CBS MoneyWatch, is Donald Trump’s signature Tax Cuts and Jobs Act of 2017, which among other things lowered the country’s corporate income tax rate to 21% from 35%.

Proponents of the cuts said the lower tax rates would incentivize companies to bring back more of their operations to the U.S. and pay more in total U.S. taxes as a result. The opposite appears to have happened, then CBS MoneyWatch analysis found.

In 2017, there were 150 companies in the S&P 500 that expensed more for foreign taxes than they did in the U.S. That number has risen steadily since Trump’s tax law was enacted. It jumped to 204 in 2018, then to 220 in 2019. The list included an additional 21 companies last year, bring the current tally up to 241.

“Following the enactment of the Tax Cuts and Jobs Act, the U.S. has turned into a tax haven of sort,” said Gabriel Zucman, a University of California at Berkeley economist and one of the world’s leading experts on corporate tax avoidance. “Many U.S. companies can pay very little in federal taxes.”

That so many U.S. companies can appear to be paying so little at home, while paying more to foreign nations, could add ammo to the growing national debate on whether U.S. companies still pay their fair share of the cost of government. A recent study found more than two dozen profitable companies haven’t paid a dollar in U.S. federal income tax since the 2017 tax cut.

This week, the Biden administration introduced a plan to raise what companies pay in federal income taxes by more than $2 trillion over the next decade. A large part of the plan is to hike the official tax rate on corporate profits to 28% from 21%. But President Biden also said he wants to eliminate the incentives companies have to move investments overseas and avoid U.S. taxes. And Treasury Secretary Janet Yellen said this week she was working with other nations to try to establish a global minimum corporate income tax. 

A corporate tax mystery

It’s impossible to know exactly how much any individual company pays in taxes. Companies, like individuals, are allowed to keep their tax filings and payments private. 

Yet public companies that report their profits to investors also must disclose in a note to their year-end financial filings how much they have put aside to pay in taxes over the next 12 months. They’re also required to detail to whom those taxes are likely to be paid, such as the federal government or state or foreign governments.

CBS MoneyWatch looked at that figure — known as the current tax expense — for every company in the S&P 500 for the past five years and compared what those companies had set aside for U.S. taxes versus what they expected to pay in foreign taxes. For a lot of companies, the latter account was considerably larger.

“In terms of figuring out what companies pay in taxes each year, it’s the best proxy we have,” said Robert Willens, one of Wall Street’s leading tax and accounting experts and an adjunct professor of accounting at Columbia University. 

Of course, Willens added, “There could be years where companies got some kind of settlement or tax rebate where the current tax expense [noted in the filing] is not what they paid.” 

A Disney spokesperson said the pandemic hurt the company’s businesses last year, resulting in less profit and, as a result, less to owe in taxes. “The amount of federal income taxes we paid [last year] isn’t comparable to what we would have seen in a more normal year,” the spokesman said in a statement. In the prior three years, Disney said, it paid a total of $12.4 billion in U.S. federal income taxes.

A spokesperson for Starbucks said the company’s financial filing, like those of other public companies, does not offer a fully accurate representation of what it actually paid last year in taxes. Starbucks paid over $1.7 billion globally in taxes its most recent fiscal year, the “majority of which was for U.S. federal income taxes,” the spokesperson said.

Netflix as case study: a 0.8% federal tax rate last year

The CBS MoneyWatch review of S&P 500 filings illustrates how the corporate tax game is often won at home these days, helped by an accumulation of domestic tax breaks and increasingly generous credits.

Consider Netflix, which declined to comment for this story. The streaming service expensed $369 million for taxes last year, its filings state. But 75% of that was for taxes outside of the U.S. Another 18% of Netflix’s tax expenses were for state or local taxes. Just 7% of its overall tax total was set aside for federal income taxes.

Netflix is booming worldwide during the pandemic but it still generates almost all its income in the U.S. — $2.8 billion, or nearly 88%, of its $3.2 billion in pretax profits last year, according to its latest annual financial filing

Based on those domestic profits, Netflix could have owed roughly $590 million in federal income taxes, given the current U.S. corporate rate of 21%. Netflix likely didn’t pay anything close to that. Instead, a variety of tax breaks and credits, passed in recent years by Washington or long blessed by the U.S. tax code, allowed the company to pay far less. 

The biggest break came from stock options, which get preferential treatment for tax purposes. That saved Netflix nearly $340 million last year. Next, Netflix reported spending $1.8 billion on technology and development last year, and received $110 million federal tax credits for doing so. Then there was Trump’s corporate tax cut, which allowed Netflix to save an additional $90 million on its IRS bill.

Add up those three breaks, along with a few other small ones, and the result is Netflix expensed just $24 million last year for federal U.S. income taxes. That’s an effective tax rate of just 0.8% on its $2.8 billion in U.S. pretax profits.

On the other side of the map, the trail of taxes for Netflix’s overseas profits heads north, not south. 

Netflix made $400 million in profits in its foreign operations, which, had they been taxed at the U.S. rate of 21%, would have generated an $85 million tax bill for Netflix. Instead, Netflix said in its filing it faces a higher rate of income tax overseas than in the U.S. — an average of 24%, which added $12 million in reported tax expenses in 2020. 

In addition, Netflix said a “global corporate simplification” last year resulted in a one-time foreign tax expense of $135 million.

Add those two tax charges, along with some other smaller ones, and Netflix’s foreign tax expense for last year reached $277 million, for a hefty effective tax rate of 68% on its $400 million in foreign pre-tax profits.

“The European Union, for one, has done a better job in regulating companies and the income tax rate they pay,” said Dean Baker, who co-founded the left-leaning Center for Economic and Policy Research. “The IRS on the other hand has mostly looked the other way.”

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Report: ASIC Giant Bitmain Pre-Orders 5nm Chips Produced by TSMC’s N5 Process – Mining Bitcoin News

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Report: ASIC Giant Bitmain Pre-Orders 5nm Chips Produced by TSMC’s N5 Process

Bitmain, one of the largest application-specific integrated circuit (ASIC) manufacturers in the world, is reportedly working with the Taiwan Semiconductor Manufacturing Company (TSMC) in order to leverage TSMC’s 5nm semiconductors. Industry sources say that the 5nm chips being created for Bitmain will start production in the third quarter.

Chip Maker TSMC Reportedly Producing Semiconductors for the Mining Rig Manufacturer Bitmain

Faster bitcoin mining rigs manufactured by Bitmain may be coming at the end of 2021 or possibly next year. A recent report published by digitimes.com says that Bitmain has placed 5nm chip orders with the Taiwan-based chipmaker.

TSMC has reportedly been contracted by Bitmain so the company can leverage the foundry’s N5 fabrication process (5nm). Currently, the world’s fastest bitcoin miners on the market crafted by firms like Bitmain, Canaan, and Microbt leverage chips between 12nm to 7nm.

The digitimes.com reporters Monica Chen and Jessie Shen claim that “industry sources” say that Bitmain has placed an order with TSMC but the amount and valuation of the alleged order are both undisclosed.

The report notes that TSMC will start production for Bitmain this year and start the process during the third quarter. In another report, the same technology columnists detail that TSMC is “stepping up 5nm chip output.”

Bitmain might be trying to acquire the 5nm products before the chips are sold out across the board. Colossal tech firms like Apple and Huawei are already purchasing chips created with TSMC’s N5 process.

Although, because Bitmain can produce capital faster than smaller tech companies, it might be one of the first in line to buy the N5 designed products. However, other bitcoin ASIC mining manufacturers and tech companies can also purchase 5nm products from Samsung.

ASIC Makers Could Also Tap Samsung’s N5 Process

Samsung has also disclosed that it has a working 5nm process and the firm is reportedly taking requests for future orders. One researcher who compared the two products created by both TSMC and Samsung said both companies will “employ more EUV layers at 5nm.”

“Samsung has said their 5nm process offers a 25% density improvement over 7nm with a 10% performance boost or 20% lower power consumption,” Scotten Jones’ post called the “TSMC and Samsung 5nm Comparison” notes. “This contrasts with TSMC who announced a 1.8x density improvement and a 15% performance improvement or 30% lower power,” Jones added.

Alongside Microbt, Bitmain makes some of the fastest ASIC bitcoin miners on the market today. The Bitmain Antminer S19 Pro, with 110 terahash per second (TH/s), gets around $19.40 per day using current BTC exchange rates and $0.12 per kilowatt-hour (kWh).

The company’s most recent release, the Antminer S19j mining rig, has a hashrate of around 90 TH/s. The Antminer S19 models use custom-built 7nm chips with an efficiency parameter of around 34.5 joules per terahash (J/TH). Bitcoin ASIC mining rigs that employ the 5nm chips should be a lot faster in terms of TH/s and more energy efficient as far as (J/TH).

What do you think about Bitmain reportedly purchasing 5nm chips from TSMC? Let us know what you think about this subject in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, TSMC,

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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He Puapua report Collins called ‘divisive’ meant to create unity, author says | RNZ News

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The author of a report described by National leader Judith Collins as “divisive” says she wishes it was not used as a “political tool”.

Photo: Dom Thomas

A working group was tasked by the government in 2019 to report on how New Zealand could realise its commitment under the UN declaration on the rights of indigenous peoples.

The group later sent Nanaia Mahuta, who was Māori Development Minister at the time, a 130-page report named He Puapua outlining their recommendations.

The government never released the full report publicly but an unredacted version was leaked to the National Party which published it at the weekend.

The report suggested a separate Māori Parliament or upper house, separate court and justice systems and Māori ownership of foreshore and seabed, as well as recommendations on cultural rights and equity.

In a speech at National’s Northern regional conference at the weekend, party leader Judith Collins called the document “divisive” and accused Labour of trying to sneak through a plan to separate systems for Māori at all levels.

A government spokesperson said the report had not been signed off by Cabinet and did not represent government policy.

Auckland Law School academic Claire Charters, who is director of the Aotearoa Centre for Indigenous Peoples in the law, was part of the working group and wrote He Puapua.

She said it was unfortunate the National Party had described the report as divisive when it was intended to create unity.

“It’s about Māori being able to realise the compact that is so constitutionally important to Aotearoa, Te Tiriti o Waitangi.

Claire Charters
Photo: University of Auckland

“In a post-colonisation world we can do that without fear and that’s about all living within a Aotearoa state but in a way that recognises that Māori were here and that the Treaty is a compact between Māori, as sovereign entities, and the British Crown and realising that shared authority under a singular state, so coming together in that way,” she said.

Charters said she wished the report wasn’t used as a “political tool” but instead used as an “instrument to have a genuine discussion about what realising our international obligations and what Te Tiriti o Waitangi requires”.

National’s framing of the report started the debate on the wrong footing, she said.

“If it’s just trying to appeal to fear of what this might look like, that’s really disappointing. We live in a better Aotearoa than that,” Charters added.

Members of the working group were disappointed the government never released the report publicly, Charters said.

“We also understood, and were in dialogue with Minister [Nanaia] Mahuta at that time about the need for Cabinet to have a good look at it, there’s some big questions in there.

“Then obviously Covid-19 intervened and I think the government focused on that and talked to us throughout about how … once it had dealt with the first initial sort of response to that, the government would be acting and indeed we’ve been in conversation since the end of last year and throughout this year about how to move it forward,” Charters said.

Officials had recently been working with the working group quite closely, Charters said.

The plan to realise the declaration needs to be subject to significant consultation, Charters said, and she hoped the He Puapua report would be the start of that conversation.

People should not be fearful of Māori authority over Māori things, she said.

“We’ve got a lot to learn and a lot to potentially gain in that while Māori are regulated by a system that is not our own, which creates its own inequality. Until we do that real structural change I think we might still be living in a colonial system.”

Speaking to media after a Cabinet meeting this afternoon, Prime Minister Jacinda Ardern said Collins’ criticisms were purely political.

“I consider it hugely disappointing that we have debates of this nature whenever it seems the National Party are in opposition and at a particular point in the polls,” Ardern said.

“I see it as nothing more than pure politics.”

The Māori Health Authority would work with the health system, Ardern said, and it was a fact that “Māori die younger in this country” and the new authority would help outcomes for Māori and non-Māori.

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