Taxing idea

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Bad ideas don't go away; they wait for the next political campaign to come around. So it is that Sen. John McCain (R., Ariz.), the Republican presidential hopeful, has revived the notion that the tax treatment of advertising costs, unchanged since the federal income tax was introduced 87 years ago, needs reforming.

As one plank in a 43-point package aimed at "corporate . . . loopholes, subsidies and set-asides," Sen. McCain regretably gives new life to the notion that marketers should be required to treat their advertising expenses the same way that they treat money spent on office furniture, factories or other tangible goods. Rather than deduct ad costs fully in the year they occur, as marketers now do, they should be "amortized" over years of time because advertising produces lingering value for a marketer.

There have been far more noxious ideas about advertising and taxes than this one, but that hardly makes the senator's idea sensible. Many in marketing would agree advertising is an "investment," but amortizing those costs would add needless complexity to business taxes with little real justification and questionable benefit to the public interest. It may be useful rhetoric on the campaign trail, but amortization of ad costs is not good policy.

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