Members of Congress Stand Strong Against an Advertising Tax

April 27, 2017

Dear Mr. Speaker and Madame Leader:

The 115^th Congress holds the promise of streamlining the corporate tax code in order to achieve lower rates for America's business and eliminate tax loopholes and special preferences. We look forward to working with you on these efforts to bolster job creation, stronger wages, and economic growth, and respectfully ask that you maintain the current tax treatment of advertising as a fully and immediately deductible business expense. The potential for strengthening our economy through tax reform would be jeopardized by any proposal that imposes an advertising tax on our nation's manufacturing, retail, and service industries.

Advertising has been accorded the same treatment as all other regularly occurring business expenses, such as employee wages, rent, utilities and office supplies, throughout the 114-year life of the tax code. Any measure that would tax advertising – and therefore would make it more expensive – cannot be justified as a matter of tax or economic policy. Moreover, such a proposal would run counter to a major goal of tax reform agreed upon by virtually all policymakers: to simplify the tax code. For example, promoting a tax on advertising while pursuing full and immediate expensing of buildings and equipment furthers the irregularities and confusion present in our current tax system.

Virtually every business in 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 of economic activity, and that advertising contributes 19 percent of our nation's GDP. Advertising also is responsible for supporting the high-quality news, information, and entertainment that is a cornerstone of our democracy and upon which our constituents rely.

We welcome the important challenges of fixing our country's tax code and strengthening America's ability to compete economically around the globe. As this Congress delves deeper into these issues over the coming year, we ask that any changes in our tax system be meaningful, economically sound, and do not threaten the impacts of advertising on jobs and the economy.

Sincerely,