The Progressive Policy Institute, an offshoot of the Democratic Leadership Council co-founded by President Clinton in 1985, includes advertising on a list of so-called business subsidies ripe for review. It specifically suggests allowing marketers to deduct only a percentage of ad costs, with the balance to be amortized. The list was originally drafted by the Congressional Budget Office in 1992.
Advertising deductibility is "considered a subsidy for business in that it contributes to brand recognition over a long period of time, and capitalizing it and deducting it over years makes more sense," said institute economic policy analyst Jeff Hamond. "What we're saying is that ad deductibility, like the national oil reserve and other subsidies, should be considered by a national bipartisan commission that would evaluate it-maybe they'd decide it should be kept."
The Progressive Policy Institute this week will offer a formal document listing its various recommendations, a sort of moderate Democrat version of the "Contract With America" conceived by Speaker of the House-designate Newt Gingrich (R., Ga.) that's credited with helping drive November's GOP landslide.
A provision of that Republican document called for balancing the federal budget but offered few specifics on how to effect such a dramatic change. Industry representatives immediately wondered whether their Republican friends might try-as they did in 1986 and again in 1990-to limit ad deductibility.