March 1, 2017
- Advertising Day on the Hill
- Legislative Meet and Greet in Nebraska
- Tax Reform Update
- FCC Chairman Halts Privacy Rule
- Advertising Under Attack
- New FTC Bureau Director Named
Advertising Day on the Hill
AAF’s Advocacy and Action: Advertising Day on the Hill
is less than a month away. This exciting event will be held on
Thursday, March 30 with a pre-conference dinner on Wednesday evening,
March 29. AAF’s Day on the Hill is the time for the advertising
industry’s grassroots to be heard.
Attendees will be
briefed on the issues by policy experts and lawmakers, including
Representative Jim Renacci, R-Ohio, an influential member of the House
Ways and Means Subcommittee on Tax Policy. They will then walk the Halls
of Congress delivering the advertising industry’s message. The Day on
the Hill is FREE to all AAF members, but registration is required. are available as well. Register early and come to Washington, DC in March to make your voice heard.
Legislative Meet and Greet in Nebraska
AAF grassroots are active in the states. On March 2 AAF-Omaha and AAF-Lincoln will host a Legislative Meet and Greet with State Senators to talk about the impact their decisions have on the advertising industry in Nebraska.
On February 7 AAF members from across Florida gathered for Advertising Day in Tallahassee organized by AAF’s 4th District.
Tax Reform Update
Shortly before the change in administrations, the Treasury Department’s Office of Tax Policy released a major report on The Case for Responsible Business Tax Reform.
The report reveals a view within the Treasury Department that expensing
(or fully deducting in the year in which the expense is incurred) the
cost of advertising is expensive and inappropriate. As one of the last
acts of the Department during the Obama administration, it is uncertain
what it will mean during the new Trump administration.
discussion of advertising is on page 16 of the document under “Expensing
of Intangible Assets and the Research and Experimentation (R&E) Tax
According to the authors, “Intangible assets include
the value of knowledge (including ‘learning by doing’) and specialized
products produced as a result of research spending, and the value of
brand names produced in part through advertising.”
concludes that “…compared to capitalizing the depreciating [costs
related to intangible assets]…expensing provides a substantial tax
benefit to intangibles over tangible assets…This generous treatment
[expensing] may be justified on the grounds that research generates
‘spillover’ benefits. Investors in research are unable to capture the
full benefits of their investments because some of the knowledge it
produces can be used by other businesses free of charge. However
this justification may be less convincing for advertising and marketing
expenses where significant spillover benefits seem less likely.” (Emphasis added)
this document was prepared by the previous administration, it
underscores the reality that the tax treatment of advertising is
continually being considered. AAF and our allies in The Advertising
Coalition will continue our ongoing education of Treasury officials as
well as lawmakers on Capitol Hill.
Meanwhile, little public
progress has been made on comprehensive tax reform since the last issue
of Government Report, however it has become clear that many Senators of
both parties view the “border adjustability” provisions of the House
Republican’s Better Way Blueprint
with a great deal of skepticism. The Blueprint has not been fully
endorsed by the White House either. Many lawmakers and administration
officials have said that they want tax reform done this year. Given the
extreme complexity of the issue, and the apparent lack of a consensus
approach, most observers believe that may be an overly ambitious goal.
the current treatment of advertising as a fully deductible has gained a
prominent defender. Grover Norquist, President of Americans for Tax
Reform and a prominent anti-tax activist, wrote a recent letter to Congress
“in opposition to changing the tax code to limit or remove the ability
of businesses to deduct advertising costs as a necessary business
expense from taxable income.”
Advertising has also lost a prominent defender. Dr. Kenneth Arrow,
the 1972 Nobel Laureate in Economics has died. In 1990 Dr. Arrow with
Dr. George Stigler, wrote a major thesis for The Advertising Coalition
supporting the current deduction of advertising costs.
FCC Chairman Halts Privacy Rule
Federal Communications Commission,
Chairman Ajit Pai has moved to stop implementation of a broadband
privacy rule that was adopted by the previous chairman despite
widespread opposition. AAF was among many groups that urged the action, arguing that the proposed rule was unnecessary since the Federal Trade Commission
already has strong privacy protection standards. AAF was concerned that
the FCC proposal was inconsistent with FTC standards and applied only
to broadband providers, not the entire online ecosystem.
Advertising Under Attack
Advertising continues to be under attack around the world.
The British Medical Journal recently published a paper highly critical of a United Kingdom government report Childhood Obesity: A Plan for Action.
The authors contend the government fell short in recommending action.
In particular they noted that the report did not call for “stronger
controls on advertising.”
The Canadian Heart and Stroke
Foundation is calling for the elimination of all food and beverage
advertising to children under the age of seventeen.
groups in New Zealand are pushing for a ban on direct-to-consumer
advertising of pharmaceuticals. New Zealand and the United States are
currently the only two countries that allow DTC advertising. The
Ministry of Health appears unlikely to opt for a ban. Ministry group
manager of regulatory policy Hannah Cameron says appropriately regulated
advertising is considered preferable to a full or partial ban, “which
could result in consumers pursuing unregulated and inaccurate
information from social media, the internet and other sources”.
New FTC Bureau Director Named
Acting Federal Trade Commission Chairman Maureen Ohlhausen has appointed Thomas Pahl
to the the Acting Director of the FTC’s Bureau of Consumer Protection.
Pahl has been a vocal advocate of deregulation. He comes to the agency
from private practice, but has previously held numerous positions at the
FTC, including a stint as Assistant Director in the Division of
<< 2017 Reports | View all Government Reports >>
The AAF protects and promotes advertising at all levels of government through grassroots activities. Our nation-wide network monitors advertising-related legislation on local, state and federal levels. We put our members face-to-face with influential lawmakers while encouraging self-regulation as a preemptor to government intervention, when appropriate of course. To learn more about our advocacy efforts, click here.