Advertisers Wage Campaign Against Camp’s Tax Plan

Chairman of the House Ways and Means Committee Dave Camp (L), R-Michigan, listens to testimony by Marilyn Tavenner, Administrator for Centers for Medicare & Medicaid Services, US Department of Health and Human Services as she speaks during a hearing with the House Ways and Means Committee in Washington, DC, October 29, 2013.
National Journal
Billy House
Add to Briefcase
See more stories about...
Billy House
Feb. 24, 2014, 5 p.m.

Ad­vert­ising lob­by­ing groups are mo­bil­iz­ing like mad men against a key piece of the tax-code re­form pack­age that House Ways and Means Com­mit­tee Chair­man Dave Camp could un­veil as early as Wed­nes­day.

“WE NEED YOUR HELP,” warns an alert sent out by the As­so­ci­ation of Na­tion­al Ad­vert­isers to its 574 mem­ber com­pan­ies last week. The group is bra­cing for battle against what it ex­pects to be a call to change the stand­ard tax de­duc­tion that busi­nesses use for ad­vert­ising ex­penses.

“[Camp] said it is time to take on spe­cial in­terests. But ad­vert­ising is not a spe­cial in­terest, and has nev­er been con­sidered a spe­cial in­terest” in the tax code, said Dan Jaffe, the Wash­ing­ton-based ex­ec­ut­ive vice pres­id­ent of the ANA.

Oth­er na­tion­al ad­vert­ising groups — such as the Ad­vert­ising Co­ali­tion and the Amer­ic­an As­so­ci­ation of Ad­vert­ising Agen­cies — are also push­ing against such a plan.

Ad­vert­ising is now treated as an or­din­ary, fully de­duct­ible busi­ness ex­pense in the year it is in­curred. The trade groups and their mem­bers fear that Camp is about to pro­pose that busi­nesses may de­duct only 50 per­cent of their ad­vert­ising ex­penses in a tax year — and re­quire that the bal­ance be amort­ized over some num­ber of years.

The latest word, they say, is that he may seek to amort­ize the de­duc­tion over a five-year peri­od. That is short­er than a pre­vi­ously-floated 10-year frame but sim­il­ar to what former Sen­ate Fin­ance Com­mit­tee Chair­man Max Baucus pro­posed in a dis­cus­sion draft in Novem­ber.

Op­pon­ents say any such change would severely dam­age agen­cies and oth­er busi­nesses that rely on ad­vert­ising spend­ing.

Ex­actly what Camp will pro­pose could still be un­der re­vi­sion, and a com­mit­tee spokes­wo­man de­clined to provide fi­nal de­tails on Monday — in­clud­ing wheth­er he would call for lower­ing the cor­por­ate tax rate from 35 per­cent to 25 per­cent. Demo­crats on the com­mit­tee said he was sug­gest­ing that change to them last sum­mer, along with lower­ing the rate for top in­di­vidu­al earners from 39.6 per­cent to 25 per­cent. The talk now is that the chair­man may be re­con­sid­er­ing that ori­gin­al plan, and that his top rate may not go be­low 30 per­cent.

But Demo­crats ar­gue that without new rev­en­ues, any such re­duc­tion wouldn’t be paid for, and so would add to the na­tion’s debt.

Camp, who faces a term lim­it at the end of 2014 as Ways and Means chair­man, will have an up­hill battle in get­ting House GOP lead­ers to back ac­tion on his pro­pos­als dur­ing what re­mains of this midterm elec­tion year. But ad­vert­isers say they don’t want to al­low any mo­mentum to build for some fu­ture ef­fort in the House and Sen­ate that is aimed at the de­duct­ib­il­ity of ad­vert­ising ex­penses.

As part of its ef­forts, the ANA has already re­leased a study with the Ad­vert­ising Co­ali­tion that says lim­it­ing the abil­ity of busi­nesses to de­duct the cost of ad­vert­ising in this way could threaten 1.7 mil­lion jobs and $456 bil­lion in sales over the next five years.

And to put a per­son­al touch on that case for law­makers, the IHS Glob­al In­sight study breaks down what would be the im­pact of the tax pro­pos­al in each of the na­tion’s 435 con­gres­sion­al dis­tricts.

In its alert to mem­ber busi­nesses, the ANA has asked them to “please con­tact mem­bers of the House Ways and Means Com­mit­tee that your com­pany has close re­la­tion­ships with and stress to them the im­port­ance of main­tain­ing the full de­duct­ib­il­ity of ad­vert­ising ex­pendit­ures.” The ANA has also put to­geth­er a list of talk­ing points and noted a web­site that deals with “the ad tax threat.”

What We're Following See More »
WITH LIVE BLOGGING
Trump Deposition Video Is Online
13 hours ago
STAFF PICKS

The video of Donald Trump's deposition in his case against restaurateur Jeffrey Zakarian is now live. Slate's Jim Newell and Josh Voorhees are live-blogging it while they watch.

Source:
SOUND LEVEL AFFECTED
Debate Commission Admits Issues with Trump’s Mic
14 hours ago
THE LATEST

The Commission on Presidential Debates put out a statement today that gives credence to Donald Trump's claims that he had a bad microphone on Monday night. "Regarding the first debate, there were issues regarding Donald Trump's audio that affected the sound level in the debate hall," read the statement in its entirety.

Source:
TRUMP VS. CHEFS
Trump Deposition Video to Be Released
14 hours ago
THE LATEST

"A video of Donald Trump testifying under oath about his provocative rhetoric about Mexicans and other Latinos is set to go public" as soon as today. "Trump gave the testimony in June at a law office in Washington in connection with one of two lawsuits he filed last year after prominent chefs reacted to the controversy over his remarks by pulling out of plans to open restaurants at his new D.C. hotel. D.C. Superior Court Judge Brian Holeman said in an order issued Thursday evening that fears the testimony might show up in campaign commercials were no basis to keep the public from seeing the video."

Source:
A CANDIDATE TO BE ‘PROUD’ OF
Chicago Tribune Endorses Gary Johnson
17 hours ago
THE LATEST

No matter that his recall of foreign leaders leaves something to be desired, Gary Johnson is the choice of the Chicago Tribune's editorial board. The editors argue that Donald Trump couldn't do the job of president, while hitting Hillary Clinton for "her intent to greatly increase federal spending and taxation, and serious questions about honesty and trust." Which leaves them with Johnson. "Every American who casts a vote for him is standing for principles," they write, "and can be proud of that vote. Yes, proud of a candidate in 2016."

NEVER TRUMP
USA Today Weighs in on Presidential Race for First Time Ever
1 days ago
THE DETAILS

"By all means vote, just not for Donald Trump." That's the message from USA Today editors, who are making the first recommendation on a presidential race in the paper's 34-year history. It's not exactly an endorsement; they make clear that the editorial board "does not have a consensus for a Clinton endorsement." But they state flatly that Donald Trump is, by "unanimous consensus of the editorial board, unfit for the presidency."

Source:
×