A group of groups is fighting against a proposal to end the business deduction for advertising expenses, pointing out that advertising is an essential driver of the entire US economy generating $5.8 trillion in value.
The group wrote a letter to House Speaker John Boehner (R-OH) asking for his support in heading off any such measure, in the wake of reports that key Rep. Dave Camp (R-MI) was looking to possibly end the deduction.
They pointed out that advertising has been recognized as a legitimate business expense for 100 years.
They wrote, “Advertising plays a unique role in our country, and the positive economic benefits derived from advertising have been emulated by countries around the world. Advertising provides Americans with access to an increasing amount of news, sport and entertainment, emergency information about dangerous weather conditions or accidents, and a host of other information that is vital to our daily lives. Advertising has made it possible for businesses in less than two decades to reach entirely new and productive audiences through the internet and to transform the ability of individuals to connect with family and friends.”
They concluded, “We urge you to maintain the current deduction for all business advertising costs as you prepare tax reform legislation.”
The signatories included:
The Advertising Coalition
American Advertising Federation
American Association of Advertising Agencies
Association of Magazine
Media Association of National Advertisers
Grocery Manufacturers Association
National Association of Broadcasters
National Cable & Telecommunications Association
National Newspaper Association
Newspaper Association of America
RBR-TVBR observation: This is a must win for everybody, not just broadcasters. Companies pay for advertising because it generates a far greater amount of value than it costs – nobody runs an ad campaign to break even.
To discourage investment in advertising is to discourage economic activity, the last thing we need at a time when we’re trying to turn sluggish improvement into robust improvement.
In short, this tax proposal does not just affect those who provide and use advertising, it affects everybody. It is utterly misguided and should be dispensed with immediately.