January 31, 2019
- CBO Lists Advertising as Possible Source of Revenue
- AAF Supports New Paradigm for Privacy
- States Looking to Implement New Privacy Laws
- DTC Advertising Under Fire
- AAF Day on the Hill Coming Soon
CBO Lists Advertising as Possible Source of Revenue
In December, the Congressional Budget Office released its “Options for Reducing the Deficit 2019 to 2028.” Two of the listed alternatives would include a tax on advertising.
The first proposal would generate an estimated $63 billion over 10 years and would require businesses to amortize half of all their advertising costs over five years. The second would require businesses to amortize half of their advertising costs over 10 years and would bring in an estimated $132 billion.
These are not new ideas. In 2013 then House Ways and Means Chairman Dave Camp, R-Mich. and Senate Finance Chairman Max Baucus, D-Mont. included virtually the same suggested taxes in their tax reform proposals.
We also know that advertising was discussed, but not adopted, as a revenue raising option in the tax reform law enacted in 2017.
AAF Supports New Paradigm for Privacy
The AAF has joined with many of its industry colleagues in suggesting to the Federal Trade Commission a New Paradigm for a national privacy standard.
The New Paradigm suggests that “Data practices should be assessed holistically through a reasonableness standard that could weigh, for instance: (i) the consumer harms and benefits, (ii) the objective expectation of a reasonable consumer; and (iii) the relevant management and risk mitigation practices of a business/organization (e.g., transparency, choice, downstream contractual protections, data security, and adherence to self-regulatory standards) with respect to the data practice in question.”
AAF believes that the adoption of a national standard is essential. Many states (see story below) are looking at enacting their own privacy laws. While well meaning, these laws could ultimately harm both consumers and businesses by resulting in a patchwork of inconsistent and contradictory privacy regimes making compliance to all difficult, if not impossible.
Numerous bills have already been introduced including the Consumer Data Protection Act by Senator Ron Wyden, D-Ore. and the American Data Dissemination Act by Senator Marco Rubio, F-Fla.
States Looking to Implement New Privacy Laws
As previously reported, the state of California has already passed its own Consumer Privacy Act. As part of the rulemaking process for implementing the law, California Attorney General Xavier Becerra is currently holding forums across the state to receive input from businesses, consumers and other interested parties who would be affected by the law. Many ad club members have or will attend the forums. In addition, AAF and many of our industry allies have sent a letter to the Attorney General expressing our concerns.
Washington State Senator Reuven Carlyle, D-Seattle has introduced a proposed Washington Privacy Act. AAF and our industry allies have written to the Senator and his colleagues expressing support for the objectives of the bill, but outlining our concerns with many of the specifics and explaining that differing privacy laws from state to state will create a fragmented Internet environment and result in consumer confusion and unnecessary business challenges.
DTC Advertising Under Fire
Recent hearings in the Senate Finance and House Oversight Committees are examining the cost of prescription drugs and both included much criticism of direct-to-consumer (DTC) advertising of those products. Finance Chairman Charles Grassley, R-Iowa and ranking member Ron Wyden, D-Ore. both decried the lack of transparency in drug pricing and have advocated putting the list price of the medications in television advertising. They are also planning a series of hearings to look at all aspects of drug marketing.
In the House Oversight hearing, Rep. Katie Hill, D-Calif. questioned whether DTC advertising provides adequate information to patients while pointing out that companies are allowed to deduct the cost of advertising as a business expense. Rep. Rashida Tlaib, D-Mich. asked how much the government could save by disallowing the deduction. No Members or witnesses offered an estimate.
Meanwhile, Senators Jeanne Shaheen, D-New Hamp. and Elizabeth Warren, D-Mass. have introduced legislation barring pharmaceutical drug manufacturers from deducting the cost of DTC advertising from their federal tax returns.
AAF will continue to defend the right to fully deduct DTC advertising as a normal and necessary business expense and a valuable source of information to consumers.
Advertising Day on the Hill Coming Soon
AAF’s Advocacy and Action: Advertising Day on the Hill is little more than a month away on March 6 and 7. Speakers are being confirmed and appointments are being made on Capitol Hill for attendees to meet with their Senators and Representatives in Congress. Register now for this important conference and plan to come to Washington, D.C., and make your voice heard on behalf of your business and the advertising industry. A special group rate has been arranged at the Hyatt Regency Capitol Hill. The deadline to book is February 13.
<< 2018 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.