The Washington Post - 20.02.2020

a1 6 eZ re the washington post.thursday, february 20 , 2020

Economy & Business

book, Google and other tech companies and joined a day-long ses- sion convened by the Justice De- partment focused on the future of the law. “But I don’t think we should assume the misconduct of a few bad actors is generalizable across a large industry,” Schruers added. Carrie Goldberg, an attorney who specializes in sexual privacy violations, offered one example of the potential harm from her own case work: A plaintiff whose ex repeatedly created fake profiles of him on Grindr, a gay dating app, putting him at risk for assault. The ex would “post my client’s geographic information, and then send people” to his home and workplace, looking for sex, Goldberg said. The plaintiff repeatedly flagged the issue to Grin- dr, to no avail, and Grindr pre- vailed in a subsequent court bat- tle by invoking Section 230. “They see Section 230, and all the case law over the past few decades... as a pass,” Goldberg continued, “and take no action whatsoever.” [email protected]

executive Mark Zuckerberg paid a rare visit to Brussels on Monday. Ahead of his visit with E.U. officials, the social-networking giant articulated its position on regula- tion, arguing in a white paper that laws that “punish the publication of illegal speech are unsuitable for the internet landscape.” In Washington, top officials on Wednesday sought to make their own case about the need for Face- book, Google and their peers — with vast reach and once unfath- omable profits — to be held accountable for their role in facili- tating the spread of dangerous posts, photos and videos. “We’re constantly reminded that the same technology that facilitates free speech, connects with our loved ones and our friends and enriches our lives can pose serious dangers,” FBI Direc- tor Christopher A. Wray said to open an event on Section 230. “Certainly, more can be done,” Matt Schruers, president of the Computer & Communications In- dustry Association, responded in a later panel discussion. The group represents Amazon, Face-

been exploring Section 230 as part of a wide-ranging probe of Facebook, Google and other companies, an inquiry that’s also studied whether those firms have become too big, powerful and anti-competitive. Justice officials have signaled they plan to put forward recommendations — and potentially bring individual cases against companies — before the end of the year. Amid withering criticism, many in the industry have em- phasized their recent work to improve their policies, hire more people to review content and take swifter, more aggressive action to ensure users aren’t harmed. Ye t their assurances have failed to assuage regulators even beyond Washington: Throughout the Eu- ropean Union, for example, policymakers have contemplated a raft of fines and other punish- ments in the event Facebook, Google and their peers fail to prevent or disable dangerous posts, photos and videos in real time. The regulatory threat has grown so dire that Facebook chief

when their technologies are used to enhance the reach of such harmful material. Lobbyists from Facebook, Google and other online plat- forms have fought vigorously to protect their prized legal shield, arguing it actually gives them cover to do the sort of content moderation that governments seek — without being sued for the decisions they make about the posts they leave up or take down. But Barr — who cautioned that he had not come to a final position on whether Section 230 should be significantly revised or repealed — highlighted its “ex- pansive reach,” a comment that could encourage members of Congress who have floated simi- lar suggestions about changes to the law. “The department has the re- sponsibility to keep up with changes in technology to protect our citizens from these new harms, while at the same time preserving the benefits of this new technology,” the attorney general said. The Justice Department has

origin of the statute. “They have become titans.” Barr’s shot at Silicon Valley offers the latest evidence that regulators in Washington — Dem- ocrats and Republicans alike — believe some of the federal safe- guards that helped incubate the Internet have become hindranc- es, preventing law enforcement and aggrieved users from obtain- ing justice when people are harmed. For all their ability to connect people across borders, Facebook, Google, and other popular sites and services also have served as conduits for hate speech and ex- tremism. They’ve unwittingly housed graphic, viral videos of recent mass shootings, including the deadly attack in Christchurch, New Zealand, last year. They’ve become marketplaces for the sale or promotion of guns, drugs and fake medical cures. And they’ve been weaponized to spread mis- information and undermine elec- tions, including in the United States. Often, they’re able to dodge direct punishment even

BY TONY ROMM

U.S. Attorney General William
P. Barr on Wednesday blasted Big
Te ch, raising the specter that Sili-
con Valley might soon be held
accountable for a wide array of
dangerous, harmful content that
critics say has flourished on their
sites and services.
At an event that laid bare tech’s
broad troubles — including the
spread of terrorism, illicit drug
sales and child sexual exploita-
tion online — Barr said it may be
time for the government to seek
sweeping changes to a key por-
tion of federal law, known as
Section 230, that long has spared
tech companies from liability for
content posted by their users.
“No longer are tech companies
the underdog upstarts,” Barr said
in a speech, reflecting on the

Barr raises prospect that Big Tech could be held liable for dangerous content

Law shielding firms from liability seems outdated, attorney general says

○

dow 29,348. up 115.84, 0.4% ○

nasdaQ 9,817. up 84.44, 0.9% ○

s&P 500 3,386. up 15.86, 0.5% ○

gold $1,611. up $8.20 0.5% ○

crude oil $53. up $1.24, 2.4% ○

10-year treasury down $0.20 per $1,000; 1.56% Yield

currencies $1=111.33 Y en, 0.93 euros

surge in new business investment, but business investment contracted much of last year. The White House also predicted that the tax cuts would help the economy grow 3 percent in 2019, but it instead grew 2.3 percent. The 2017 tax cut is projected to increase the national debt by close to $2 trillion over 10 years, according to nonpartisan esti- mates, drawing criticisms against Trump of fiscal profligacy as the annual deficit rises above $1 trillion. Opponents of the tax law such as presidential candidate Sen. Bernie Sanders (I-Vt.) have as- sailed the GOP and multibillion- dollar corporations for allegedly paying nothing in federal taxes

under the new law. Ninety-one companies on the Fortune 500 paid zero in federal corporate taxes in 2018, more than double the amount in previous years, according to a left-leaning policy group, although experts caution it’s d iffi- cult to draw e xact comparisons to prior years. The average federal tax rate of the country’s largest 400 corporations was about 11 percent in 2018, the lowest rate since at least 1984 and a steep drop from the average 21 percent rate paid between 2008 and 2015, according to the Insti- tute on Ta xation and Economic Policy. Companies have defended their low corporate tax burden, with some noting they are either

deferring tax payments into future years or using new deductions intended to encourage new business investment. Republi- cans and conservative tax experts also say the business tax cut helped spur economic growth and dramatically increased business investment in the economy. The economy grew 2.9 percent in 2018, a three-year high. “A mericans are returning to the workforce, and consumers have more money in their pock- ets. President Trump’s economic program is leading to more jobs and higher wages for hardwork- ing Americans,” Treasury Secre- tary Steven Mnuchin said in a statement last year. [email protected]

Jahi chikwendiu/the washington post Larry Kudlow, director of the National Economic Council, speaks at the White House last month. New focus on a possible corporate minimum tax comes as President Trump has urged a middle-class tax cut ahead of this year’s election — and amid concern over the effects of Republicans’ 2 017 overhaul.

BY JEFF STEIN

Economic advisers to the
White House have suggested
President Trump propose a new
minimum tax on corporations as
part of his election year “tax cut
2.0” package, two people briefed
on the planning said, hoping to
address criticism that the 2017 t ax
law allowed many of the country’s
largest firms to virtually elimi-
nate their federal tax burden.
The idea, which is part of pre-
liminary discussions and has not
been officially endorsed, could at-
tempt to blunt criticism from
Democrats that the GOP tax law
allowed many large corporations
to wipe out their federal corpo-
rate taxes altogether. The plan
could also help generate revenue
that might be used to offset the
impact of new middle-class tax
cuts. Trump has promised he
would roll out a middle-class tax
plan before the 2020 presidential
election.
The 2017 tax law lowered the
corporate tax rate from 35 percent
to 21 percent, but it allowed com-
panies to continuing using loop-
holes and tax breaks to further
lower their taxes. The tax law also
eliminated the corporate alterna-
tive minimum tax, which was sup-
posed to prevent companies from
overusing deductions to avoid
paying any taxes.

Democrats and critics have said this tax cut was heavily weighted toward the rich and corporations, and the component that benefits households is set to expire in a few years. Some advisers to the president fear a political backlash because of reports that some corporations have paid little or no taxes since the law’s enact- ment, an issue seized on by some of Trump’s top presidential rivals. Both outside advisers to the president and White House officials cautioned that the process is in its preliminary stages and that no decisions have been made about the shape of a new tax cut package. Many of them spoke on the condition of anonymity because they weren’t authorized to discuss the internal deliberations. “Trump has been very clear: He wants this to be really targeted for people in the middle,” said one person involved in the effort. “They are hunting for ideas and looking at w hat we can to do offset some of this stuff.” Proposing a minimum tax on corporations could be interpreted by critics as an admission by the White House that its 2017 tax cut went too far in slashing business rates. The potential tax plan also un- derscores the political and policy challenges the White House will face in crafting a second tax cut proposal in time for the 2020 election, in part because the White House appears to have overestimated the economic benefits that would result from the 2017 law. External advisers to the White House have discussed construct-

ing a $1 trillion tax cut package that is aimed at the middle class by lowering rates and expanding tax-free savings accounts. They have also discussed putting limits on the amount of state and local tax payments that companies are able to deduct from their federal taxes, people involved in the talks said. “The White House is studying numerous proposals that will benefit the middle class and the American worker and promote long-term economic growth,” White House spokesman Judd Deere said. An effort to limit state and local tax breaks for corporations would reprise one of the most bitter fights of the 2017 tax cut, which capped how much individual households could deduct in federal taxes from their state and local taxes. This provision, known as the “SALT” cap, was attacked as an attempt by Trump to dispro- portionately raise money by tax- ing Democratic-run states with higher state and local tax bur- dens, such as California, New Jer- sey and New York. “It’s blue states that tend to have higher state corporate tax rates, and so they would be the ones hit most by a corporate SALT cap,” s aid Ernie Te deschi, a former economist for the Obama administration. After the tax law was passed, corporate tax payments came in about 40 percent lower than had been projected before any changes were made, according to the Brookings Institution, a Washing- ton think tank. The White House said the tax cuts would lead to a

White House weighs return

of a m inimum corporate tax

Concerns about firms paying zero as aides work on m iddle-class tax break

gasoline prices. — Associated Press

Federal reserVe

Officials: Coronavirus among economic risks

Federal Reserve officials were mostly optimistic about the U.S. and g lobal e conomies last month, though t hey noted t he risk posed

by China’s viral outbreak and were ready to keep their benchmark i nterest rate at i ts current low level for t he coming months. Fed policymakers s aid at t heir Jan. 28-29 meeting t hat risks to the U.S. economy h ad f aded s ince the Fed’s p revious m eeting i n December, a ccording to minutes released Wednesday. T he Trump administration has reached a

energy

North Dakota approves

expanded pipeline

North Dakota r egulators on
Wednesday unanimously
approved expanded capacity for
the D akota Access pipeline,
saying they b elieve t he project
has m et e xhaustive s tate and
federal requirements.
The 3-to-0 vote by the a ll-
Republican Public S ervice
Commission came after the body
signaled last m onth it was l ikely
to approve a permit to expand the
capacity of the pipeline, despite
objections f rom opponents who
said i t would increase the
probability of a disastrous o il spill.
Te xas-based Energy Transfer
proposed d oubling the c apacity o f
the p ipeline last year t o meet
growing demand for oil
shipments from North Dakota,
without the n eed for additional
pipelines or rail s hipments.
Commissioner Brian Kroshus
said Wednesday he believes t he
project w ould help t ake oil trucks
off the r oad, r educing traffic
fatalities.
The company plans to build a
$40 m illion pump s tation n ear
Linton. The station is n ecessary
to increase t he volume of oil t he
pipeline can move.
The company also p lans

additional pumping stations in South Dakota, Iowa and Illinois. — Associated Press

u.s. economy

Fastest rise in producer prices since 2018

U.S. p roducer prices c limbed last month at t he f astest p ace since October 2018 a s higher prices for services more than offset a drop in energy costs. The Labor Department s aid Wednesday its producer p rice index, which measures inflationary pressures b efore they reach t he consumer, j umped 0.5 percent in January after rising 0.2 p ercent in December. The monthly i ncrease w as bigger than economists e xpected. Wholesale prices a re up 2.1 percent over the past y ear. Excluding volatile f ood a nd energy prices, c ore p roducer inflation r ose 0 .5 percent in January f rom December a nd 1.7 percent from January 2 019. The Labor Department s aid much of the 0.7 percent January increase in the c ost of services came from higher markups for clothes, jewelry, s hoes a nd accessories. Energy prices dropped 0. percent last month, pulled down by a 1.5 percent decrease in

preliminary trade a greement with China, a nd Congress approved an updated t rade pact with Canada and Mexico. Still, “a number of d ownside r isks remained prominent,” o fficials said, including t he coronavirus, which “ had emerged as a new risk to the g lobal growth o utlook.” The minutes of the Fed’s meeting s howed officials were ready t o keep t he key rate at a range of 1 .5 p ercent to 1.75 percent for t he foreseeable future. Rates at t hat level would help the U.S. economy w ithstand any threats from s lower growth overseas, policymakers s aid, and help push inflation back to the Fed’s 2 percent o bjective. — A ssociated Press

also in Business Blue Apron, the online seller of meal kits, said i t may put itself u p for s ale. T he s truggling company, which p ioneered the meal kit craze in t he United S tates, h as faced tough competition. Blue Apron said Tuesday its n umber of customers fell 3 7 percent to 351 ,000 in the l ast three m onths of 2019. T he New York-based company s aid it is also considering merging with another company or selling parts of its business. U.S. new-home construction remained robust i n January and

applications to build h it the highest level since 2007 as low mortgage rates and a solid labor market continued to fuel h ousing demand. Residential starts slipped 3.6 p ercent to a 1.57 million a nnualized rate, still the s econd-fastest pace of t he expansion, after an upwardly revised D ecember e stimate of 1 .63 million, a ccording t o government figures released Wednesday. The judge overseeing Pacific Gas & E lectric’s c riminal probation o rdered t he utility t o explain h ow its e quipment inspections overlooked rusty, worn hooks on p ower transmission towers near t he origin of California’s d eadliest wildfire. U.S. District Judge William Alsup issued t he order Wednesday in response to a report by a n expert witness w ith photographs of rusty c-hooks on a transmission line n ear the site of the 2 018 Camp F ire in the S ierra foothills that killed 85 p eople and destroyed t he town of Paradise. Alsup directed the u tility t o provide full details a nd r ecords of its o wn inspections. — F rom news services

coming today 10 a.m.: Freddie Mac releases weekly mortgage rates.

digest

alvaro Barrientos/associated press A pedestrian crosses a street blocked by tractors Wednesday at a rally in Pamplona, Spain. The country’s farmers a re protesting declining agricultural incomes, the Associated Press reported.

The Washington Post - 20.02.2020

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