Ad deductibility dodges bullet

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Advertising and marketing groups were celebrating today after U.S. House and Senate Republicans made no mention of changes in the deductibility of advertising in unveiling their budget plans. Advertising's escape had been apparent late yesterday, but the groups were still relieved after the final reports from the House and Senate Budget Committees came out. There were reports today that Republican fears that the ad tax would be too controversial prompted the dropping of the proposal. The American Advertising Federation said House Speaker Newt Gingrich told various constituents that the ad tax was "a bad idea" and "dead." Rep. Nick Smith (R., Mich), a member of the House Budget Committee, said last night there was fear that changing deductibility would be seen as a tax increase.

Copyright 1995 Crain Communications Inc.

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