Reports indicate that one of the planks in a tax bill being put together by Sen. Max Baucus (D-MT) is a reduction of the advertising business deduction. But an article in the Hill puts the focus on taxing money corporations are said to have been parking or earning abroad.
Baucus believes it is far too easy for corporations to deposit money in the banks of certain low-tax nations to avoid paying in the U.S., and plans to make that a much more difficult proposition.
There would be a minimum tax placed on off-shore holdings, and a $2 Trillion one-timer to account for all the cash that is already overseas.
Baucus calls this initiative a start, and that’s all it is, because it is already being met with skepticism across the aisle. Republicans like the idea of bringing money back home but do not like the idea of raising taxes too high on money that stays overseas.
Baucus is also running into trouble with members of his own party. The Hill notes that Majority Leader Harry Reid (D-NV) believes the focus should be on finding more new revenue.
The article made no mention of any changes to advertising deductibility rules.
RBR-TVBR observation: The less important a given plank in a body of legislation, the easier it is to have it erased. The fact that the focus of the tax debate will be on corporate minimum taxes and off-shore funds gives the many members of the business community that rely on advertising to scrub the noxious plank out of the bill.
Of course, the problem will come if no common ground is found on major items under consideration and changing the advertising deduction is seen as at least one piece of low-hanging fruit that both parties can agree on.
It is the job of the advertising universe to make sure that does not happen.