Clark Rector Jr., Executive Vice President–Government Affairs
New Leadership in the House
Representative Paul Ryan, R-Wisc., has been selected as the new Speaker of the U.S. House of Representatives replacing former Rep. John Boehner, R-Ohio, who has resigned from Congress.
Rep. Ryan had previously been chair of the tax writing Ways and Means Committee. Earlier this year, members of the American Advertising Federation (AAF) and our partners in The Advertising Coalition (TAC) met with Chairman Ryan to discuss the importance of maintaining advertising as a fully deductible normal and necessary business expense in the corporate tax code. While he took no position for or against, Rep. Ryan is well educated on the issue.
A new Chairman of Ways and Means has not yet been selected. The two most likely contenders are considered to be Rep. Kevin Brady, R-Texas, and Rep. Pat Tiberi, R-Ohio. The AAF and TAC have met with Rep. Brady to educate him on the importance of keeping advertising fully deductible. Rep. Tiberi has not yet scheduled a meeting with us, but he did address AAF’s 2013 Government Affairs Conference, where the AAF grassroots were able to demonstrate the importance of the issue by their very presence in Washington.
Carson Tax Plan Could Hit Advertising
In the Republican Presidential debate on October 27, Dr. Ben Carson reiterated his support for a flat tax at a rate close to 15 percent. In defending his proposal, he said that rate was achievable, but “You also have to get rid of all the deductions and all the loopholes.” Should the flat tax apply to corporations as well – as seems to be his wish – then advertising would seemingly be one of the deductions eliminated.
UK Report Calls for Less Advertising
A recent report by Public Health England recommended a “sugar tax” of up to 20 percent, as well as reductions in the advertising of “fizzy drinks and fattening snacks.” The United Kingdom already has curbs on advertising during children’s programs. The report suggests extending those curbs to programs that children are likely to watch. It also says that the restrictions could be extended to social media, cinemas, online and in games.
Record Amounts of Political Ads Expected
Forecasters are expecting the 2015-2016 election cycle will generate records amounts of spending on political advertising. The estimates are for national, state and local contests and anticipate more advertising for more extended periods than in previous elections. While this may benefit some media, it could make it difficult for commercial advertisers as rates are likely to increase as less quality time and space is available.
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