Please use this draft letter for advocating no change to the tax treatment of advertising in the proposed tax reform bill. This letter uses text from letters signed by House and Senate members (sent to both the House Speaker and the Senate Majority and Minority leaders) and copy to make it more appropriate from a business owner’s perspective.
The 115 th Congress holds the promise of streamlining the corporate tax code in order to achieve lower rates for America’s businesses and eliminate tax loopholes and special preferences. We vigorously support these efforts to boost job creation, grow wages and strengthen the economy. The potential
for strengthening the economy would be jeopardized by any proposal that imposes an advertising tax on our nation’s manufacturing, retail and service industries.
In our system we tax profits. By definition, a profit is the difference between revenue and costs. Advertising, as a reoccurring cost of doing business, is and should remain to be, accorded the same treatment as all other regularly occurring business expenses, such as employee wages, rent and
utilities. Any measure that would tax advertising, and therefore make it more expensive, cannot be justified as a matter of tax or economic policy.
America relies on advertising to inform potential customers, generate sales and support workers across our nation. A study by the economic consulting firm IHS Economics and Country Risk found that in 2014, advertising supported 20 million U.S. jobs and $5.8 trillion in U. S. sales. Significantly, the
study showed that every dollar of advertising spending generates $19 million of economic activity, and that advertising contributes to 19 percent of the nation’s GDP. Advertising is also responsible for supporting the high-quality news, information and entertainment that is a cornerstone of our democracy and upon which every American relies.
Let there be no doubt that any change to the current tax treatment of advertising as a deductible and immediate business expense, will negatively and significantly impact businesses across the nation and will have long term damaging effects on millions of U.S. workers and consumers.
Thank you for your efforts in considering the challenges of fixing our country’s tax code and strengthening America’s ability to compete economically around the globe. I ask that any changes in our tax system be meaningful, economically sound, and do not threaten the impacts of advertising jobs and the economy.