3 SENATORS LIGHT CHALLENGE TO AD DEDUCTIBILITY

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The fight over advertising's deductibility may be making a fast trip to the U.S. Senate floor, with the immediate target being tobacco.

Sens. Bill Bradley, (D., N.J.), Tom Harkin, (D., Iowa), and Frank Lautenberg, (D., N.J.), are aiming to launch the attack quickly by amending an as yet unchosen, unrelated bill.

Last week the three announced plans to reintroduce and strengthen some of their earlier proposals against the tobacco industry.

The anti-tobacco measures include removing the full deductibility of advertising on corporate income taxes, hiking the federal cigarette tax to $1 a pack from 24 cents and forcing tobacco companies to repay the federal government for tobacco-related Medicare and Medicaid expenses.

Advertising groups last week were issuing a call to arms about the proposals.

"If they pass this amendment [to the legislation], the First Amendment will go up in smoke," said Dan Jaffe, exec VP of the Association of National Advertisers. "Once you open the door, [there are] a whole raft of products that will follow ..... alcohol, a limitation of deduction for advertising on violent programming .... The list will be very long."

American Advertising Federation President Wally Snyder warned that removing ad deductibility for a single product would be a tax on free speech.

"It's a violation of the Constitution," he said. "In essence you are taxing the speaker, making it more costly to speak. It's further unconstitutional because you are only taking away the right for one speaker."

While quick to decry the moves, the advertising lobbyists were hopeful passage would be unlikely in the Republican-controlled Senate.

However, the three senators were optimistic that Congress' current move to cut the deficit while also offering a middle-class tax break would help measures which have found little success in the past.

"What we've done with Joe Camel is made him a deductible dependent by allowing advertising to be written off," said Sen. Bradley. "The government should not be subsidizing this kind of advertising or this kind of activity. In fact, it should be taxing it much more aggressively."

As expected, the tobacco industry was quick to oppose the measures.

"The anti-tobacco proposals are a trio of previously failed attempts to selectively and punitively raise taxes on the middle and working classes, undermine the First Amendment and fund government programs through illogical and inappropriate means," said the Tobacco Institute in a statement.

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