Advertising on radio and TV is a fully tax deductible expense and has been for a hundred years. It must have made sense a hundred years ago, but not so much now. Members of Congress see it as a loophole and want to close it up.
A 100% tax deduction for people in radio and TV who are making tons of money seems strange.
Rep. Dave Camp (R-Mich.), chairman of the House ways and means committee, and ranking member Sander Levin (D-Mich.) were considering cutting the ad tax deduction by 50% in the first year and forcing companies to amortize the remaining 50% over 10 years.
Camp removed the provision from his draft of a measure for tax reform but all 50 state broadcaster associations and advertising and media lobbyists are fighting back because there is talk of Max Baucus in the Senate picking it up.
The problem is that many local TV and radio stations rely on advertising to survive and removing the tax deduction would be a great disincentive. Businesses are also being slapped with massive regulations and they believe this will kill business.
I’d personally like to see all subsidies and deductions removed for businesses across the board. We could have a true free market. However, the timing might be wrong. It appears to provide the government with another ATM machine which I don’t want to see them have, the money never comes back to taxpayers and it never seems to go to paying off debt.
It’s an awfully large deduction for advertisers however. Charities don’t rate to the same degree.
Tax deductions do eventually come out of everyone’s pocket. The money has to come from somewhere.
What do you think? It’s the first I’ve ever heard of it.
Did taxpayers help pay for these crazy Obamacare ads?
Full story at ad week.