Education Not Endless Scrolling Act
- Sponsor
- Rep. Auchincloss, Jake [D-MA-4]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Dec 1, 2025
Bottom line
The bill aims to fund critical educational and journalistic initiatives by imposing a new tax on the largest digital advertising companies.
What it actually does
This bill establishes a new 50% excise tax on the gross receipts of large digital advertising platforms that exceed $2.5 billion annually, with the collected revenue equally divided among three new trust funds. These funds are dedicated to supporting local journalism (contingent on future tax credit legislation), one-on-one tutoring programs in eligible schools, and career and technical education initiatives.
Proponents argue
Supporters argue that this legislation creates a dedicated and sustainable funding stream for vital public goods like education and local journalism by taxing highly profitable digital advertising giants. They contend it addresses concerns about market dominance and reinvests profits from 'endless scrolling' into tangible societal benefits, fostering a more informed populace and a skilled workforce.
Opponents contend
Opponents might argue that this new tax could stifle innovation within the digital advertising sector, potentially leading to increased advertising costs for small businesses that rely on these platforms, or reduced service quality. They may also view it as a punitive measure against successful companies and question the efficiency of the proposed trust fund mechanisms.
The bill is concise and its core provisions are clearly articulated, allowing for a quick and informed review by an interested reader.
Section 2, amending Chapter 33 of the Internal Revenue Code of 1986.
Imposition of Tax on Digital Advertising Services
This section establishes a new tax on large digital advertising platforms. It imposes a 50% tax on the gross receipts from hosting digital advertising services in the United States that exceed $2.5 billion in the preceding taxable year. The bill broadly defines 'digital advertising services' to include various forms of online advertisements such as banner, search engine, interstitial, and sponsored results.
Supporters argue
Supporters argue this tax targets highly profitable tech giants, ensuring they contribute more to public good and addressing concerns about market concentration and the societal costs associated with excessive digital engagement.
Critics contend
Critics might contend this is a punitive tax that could disincentivize investment in digital advertising infrastructure, potentially leading to higher costs for advertisers or reduced service quality. They may also argue it unfairly targets a specific industry.
Tradeoffs
This provision balances the desire to generate revenue from large tech companies with concerns about potential impacts on the digital advertising ecosystem and broader economy.
Section 3, amending Subchapter A of Chapter 98 of the Internal Revenue Code of 1986.
Establishment of Local Journalism Preservation Trust Fund
This section creates a new trust fund in the U.S. Treasury, to which one-third of the revenues from the digital advertising tax will be appropriated. These funds are earmarked to support future tax credits for local journalism entities hiring journalists or for small businesses advertising in local news outlets, once such a law is enacted.
Section 4, amending Subchapter A of Chapter 98 of the Internal Revenue Code of 1986.
Establishment of One-on-One Tutoring Trust Fund
This section establishes another trust fund, the One-on-One Tutoring Trust Fund, which will receive one-third of the revenues from the digital advertising tax. Funds from this trust will be directly available, without further appropriation, to support a new grant program for individual tutoring in eligible schools.
Section 5, amending Subchapter A of Chapter 98 of the Internal Revenue Code of 1986.
Establishment of Career and Technical Education Support Trust Fund
This section creates a third trust fund, the Career and Technical Education Support Trust Fund, also receiving one-third of the digital advertising tax revenues. These funds will be available, without further appropriation, to supplement allocations under Section 111 of the Carl D. Perkins Career and Technical Education Act of 1965.
Section 6.
Authorization of One-on-One Tutoring Grant Program
This section directs the Secretary of Education to establish a competitive grant program within 180 days of enactment. State educational agencies will receive grants to provide funds to eligible Title I elementary and secondary schools to support individual tutoring programs for students. The Secretary is also tasked with promulgating regulations for application requirements, grant periods, and program requirements.
Section 7, amending Section 111 of the Carl D. Perkins Career and Technical Education Act of 1965.
Clarification of CTE Funding Inclusion
This section clarifies that for fiscal year 2027 and subsequent years, references to 'amount appropriated under section 9' and 'amount appropriated for allotments under this section' within Section 111 of the Perkins Act shall also include the aggregate amount appropriated to the Career and Technical Education Support Trust Fund from the preceding fiscal year. This ensures the new trust fund's resources are integrated into the existing Perkins Act funding structure.
Authorizes the Secretary to issue regulations imposing a penalty fee on digital advertising service hosts who deliberately advertise or promote the use of virtual private network (VPN) services for the purpose of evading the digital advertising tax.
Section 2(e), amending the Internal Revenue Code of 1986.
Why it matters:This is standard legislative practice for granting regulatory authority and specific enforcement tools, rather than being evasive.
Case for: Proponents would argue this is a necessary anti-evasion measure to ensure the integrity of the new tax, preventing companies from actively undermining the revenue stream.
Case against: Critics might argue that such a penalty could be overly broad or difficult to enforce, potentially chilling legitimate discussions about online privacy and security, even if not directly intended for tax evasion.
Estimated impact: Prevents potential tax evasion, securing billions in revenue.
States that amounts in the Local Journalism Preservation Trust Fund will be held 'unless and until a law is enacted which establishes a tax credit for (1) local journalism entities for expenses related to the hiring of journalists, or (2) small businesses for expenses related to advertising in local news outlets.'
Section 3(b), amending Section 9512(b) of the Internal Revenue Code of 1986.
Why it matters:This is a common legislative strategy to create a funding source now, while deferring the specifics of its expenditure to a later, separate legislative process. It could be seen as a way to build consensus on the funding source first.
Case for: Proponents would argue this allows for a dedicated funding stream to be established immediately, signaling commitment to local journalism, while allowing time for a more detailed and potentially bipartisan consensus to form around the specific tax credit structure.
Case against: Critics might argue that this creates an 'empty promise' or a trust fund that sits idle, as the actual benefit to local journalism is contingent on future legislative action, which may never materialize.
Estimated impact: Billions of dollars could be held in the fund, awaiting a future legislative trigger.