Thursday, February 27, 2014

New Tax Code Proposal Gets Chorus of Boos

Rep. Dave Camp
Dave Camp (R-Mich.), the outgoing chairman of the House Ways and Means Committee, unveiled his tax reform package Wednesday, and, according to,  the bad news for the advertising and media industries is that it includes new limits on the advertising tax deduction. As feared, Camp's proposal would cut the deduction by half in the first year with the rest amortized over 10 years.

To help out small businesses and local advertisers, Camp's draft would allow companies to expense the first million dollars of advertising, provided the total advertising budget does not exceed $2 million.

Camp's proposal, at nearly 1,000 pages, would lower the corporate tax rate from 35 to 25 percent and simplify and reduce tax rates for individuals into two brackets, 10 and 25 percent. To pay for those decreases, he had to find some "pay fors." The advertising tax deduction—for more than a century treated as an ordinary, fully deductible business expense—is now being treated as a loophole or special interest.

In response to Wednesday's release of a tax reform discussion draft, NAB Executive Vice President of Communications Dennis Wharton issued a statement:

NAB's Dennis Wharton
"NAB strongly opposes any job-killing proposal that would limit the ability of thousands of large and small businesses from fully deducting their annual advertising expenses. Advertising on local radio and television stations is a key driver of the American economy – indeed, a recent study found local broadcast advertising generates $1.05 trillion in GDP and supports 1.48 million jobs. NAB will work with lawmakers and other stakeholders to ensure the advertising tax deduction continues to create economic prosperity and well-paying jobs."

The Washington Times reports Senate Minority Leader Mitch McConnell, Kentucky Republican, said Tuesday there was no chance of tax reform happening this year, and House Speaker John A. Boehner offered another stiff-arm Wednesday when asked about the investment income provision.

“Blah, blah, blah, blah,” the Ohio Republican said. “Listen, there’s a conversation that needs to begin. This is the beginning of the conversation.”

No comments:

Post a Comment