Government Report: June 18, 2009

AAF Government Report

June 18, 2009

Clark Rector Jr., Executive Vice President – Government Affairs

Advertising Deductibility Targeted

The Senate Finance and House Ways and Means Committee are both in the process of looking for funding sources for healthcare reform. One possible source being seriously considered in both committees is an elimination of the federal tax deduction for the advertising of prescription medications. Ways and Means Chairman Charles Rangel, D-N.Y., has spoken in favor of the proposal.

AAF is working closely with its local ad clubs and federation and other members to vigorously express our opposition to any elimination or limitation of the business tax deduction for advertising.

Other revenue options reportedly being considered include:

  • Surtax of two percent on single taxpayers earning more than $200,000 and households earning more than $250,000.

  • Increase the Medicare payroll tax 0.375 percentage points.

  • Cap the exclusion from taxation of employer-provided health care coverage valued at more than 110 percent of the Federal Employee Health Benefit Plan.

  • Impose a tax of 10 cents per can on sweetened beverages.

  • Increase federal alcohol taxes

  • New employer "payroll" tax of 3 percent on employer health care expenditures.

  • Revenue raising items proposed in Administration budget, including international tax proposals, provisions targeting life insurance companies and their products, and oil and gas provisions.

  • Value-added tax of 1 percent to 1.5 percent or a .65 percentage point increase in the Medicare payroll tax. VAT exemptions for housing, financial services, education and medical care mandate a rate of 2 to 3 percent.

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Online Advertising to be Examined

The House Energy and Commerce subcommittee on Commerce, Trade and Consumer Protection was scheduled to hold a Thursday hearing on online behavioral advertising. Scheduled witnesses included representatives from Yahoo!, Google, Facebook, the Network Advertising Initiative and the Center for Digital Democracy. Some members of Congress have been highly critical of behavioral advertising and have indicated they may attempt to pass a bill imposing greater regulations later this summer.

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Tobacco Bill Sent to President

The Congress has passed and sent to President Obama legislation which would severely restrict tobacco companies from advertising to legal smokers. The AAF has opposed this legislation believing not only that it violates the First Amendment but that it sets the stage for new restrictive legislation against any disfavored product. A court challenge to this legislation is considered possible.

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