In the early 1950s, the idea of running commercials on free television broadcasts really hit its stride (although the first television ad in the U.S. actually dates back to 1941).
Now that content can be delivered asynchronously over the internet, the entire premise of broadcast television may be on its way out. Once people can watch a show whenever they want — and in particular, can skip over ads — subscription models, like the one employed by Netflix, may be the only commercially viable alternative.
Which in a way would be sad, because commercial television is a pure example of something difficult to achieve: A perfectly progressive tax.
When you watch television shows that are paid for by ads, you “pay” with your time. Whatever your time is worth, that’s essentially what it costs you to watch.
For example, somebody who is earning the current U.S. federal minimum wage of $7.25 an hour is paying approximately twelve cents to sit through a one minute TV ad.
In contrast, Larry Ellison, the CEO of Oracle, who earned $77,000,000 in 2013, is essentially paying about $640 to watch that same one minute spot.
It makes sense that this perfect form of progressive taxation emerged with the rise of the middle class in the U.S. after World War II — a time when the American Dream was truly becoming a reality for a large percentage of the population.
Of course, we now live in much different times. These days, if you are born poor, the pretense that you have a fair shot at merit based success has become a grim and unfunny joke, at least in the United States. For millions of citizens, just the crippling cost of paying off loans to get a college education is placing that dream hopelessly out of reach.
How fitting that one of our most perfectly progressive forms of taxation seems to be heading for the dustbin of history.