AAF Government Report | June 2017

Clark Rector, Jr., Executive Vice President of Government Affairs

Tax Reform Begins
Major Privacy Legislation Introduced
Tax Reform Begins

The House Ways and Means Committee held the first 2017 hearing on tax reform on May 18. The focus of the hearing was on how tax reform would grow the economy and create jobs. The hearing was a first step in what is expected to be, at best, a very long process.

One takeaway from the hearing is that House leaders are still very much in favor of a Border Adjustment Tax, which would tax most imported goods. However, that plan has received very little support in either the Senate or Trump Administration, potentially clearing the way for other corporate tax reform plans.

Some observers, including a former chief of staff for the Joint Tax Committee believe that a final plan is likely to be very similar to the 2014 proposal offered by former Ways and Means Committee Chair Dave Camp, R-Mich. The Camp proposal would have lowered the corporate tax rate to 25 percent and eliminated many tax preferences and deductions, including limiting the federal deduction for advertising expenses to 50% in the current year with the remaining 50% amortized over ten years. A similar plan was introduced at the same time in the Senate by then Finance Committee Chair Max Baucus, D-Mont., although the amortization schedule in the Senate plan was for five years.

Advertising has not been a part of current tax reform discussions (and was not mentioned at the Ways and Means hearing). Nevertheless, AAF and other members of The Advertising Coalition are taking nothing for granted and continue to educate lawmakers about the value of advertising and role in spurring the economy and generating jobs.

Local AAF members have attended many grassroots meetings between advertising industry constituents and members of the Congressional tax writing committees held in their home districts. AAF members have also urged their Representatives to sign the letter authored by Congressmen Kevin Yoder, R-Kansas and Eliot Engel, D-New York, and signed by 124 members of Congress defending the advertising deduction. The letter generated positive coverage in the Washington, DC publication The Hill.

Major Privacy Legislation Introduced

Congresswoman Marcia Blackburn, R-Tenn., has introduced what many consider to be the first major piece of privacy legislation in 2017, the Balancing the Rights of Web Surfers Equally and Responsibly (BROWSER) Act. The Congresswoman led the recent Congressional effort to repeal the Federal Communications Commission recent privacy rulemaking.

The bill takes the positive step of designating the Federal Trade Commission as the nation’s sole online privacy enforcer, including over internet service providers and edge providers. Unfortunately, the bill would do what the FCC rules tried to do by expanding the category of “sensitive information” far beyond what the FTC has ever recognized, including browsing history.

The bill would expand the definition of sensitive data and require opt-in consent for all use, disclosure and access to such data. This would likely chill innovation and frustrate Internet users, as it could result in consumers facing a bombardment of disruptive opt-in notices.

The AAF believes that the FTC’s privacy enforcement, coupled with strong industry self-regulation through the Digital Advertising Alliance, has worked well to protect consumers. The FTC requires consumers to opt-in before companies can collect sensitive data (such as financial or medical data) but allows for an opt-out regime for non-sensitive data. The DAA’s self-regulatory approach aligns with the FTC’s approach to non-sensitive data and provides a flexible, innovative and independently enforceable framework that keeps pace with the marketplace.

AAF will continue to work with our industry partners to educate policymakers to stay with a successful regulatory approach that protects consumer privacy and allows for industry innovation.

Many state lawmakers continue to introduce privacy legislation as well. Since the last Government Report, AAF and our industry partners have sent letters expressing concern about bills introduced in Connecticut, Maine, New Hampshire and New Jersey.

The AAF Government Report is available to all members of the AAF. If you are interested in receiving an emailed copy, please email government@aaf.org.

If you are interested in receiving the AAF SmartBrief, an opt-in news service, please visit www.smartbrief.com/aaf. The AAF SmartBrief condenses advertising industry news from dozens of media sources into a succinct, easy to read email.

Go to the AAF’s Advocacy webpage.



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