Sept. 18, 2017 – As pressure builds at the White House and among Republicans to pass some sort of tax reform, the Coalition for Healthcare Communication is mobilizing its members to express their support for “the full and immediate deductibility of all marketing costs, including those for medical marketing,” according to a memo sent to members by Coalition Executive Director John Kamp.
With short timelines to get any reform plan off the ground, tax reform leaders “are harkening back to older proposals to raise money, including the idea of amortizing rather than immediately deducting marketing expense,” Kamp said in the memo. He also referenced a memo from The Advertising Coalition (TAC) which summarized a meeting that group had with Department of the Treasury officials; this memo stated that these officials “strongly intimated that a forthcoming bill would include some sort of amortization of advertising costs.”
According to the Government Accountability Office, the expected tax change – immediately deducting 50 percent of marketing expenses in the year spent and amortizing the other 50 percent over five or ten years – would lead to a tax on advertising of $169 billion over 10 years. However, TAC points out that advertising is essential to the U.S. economy, contributing $5.8 trillion (16 percent) to total U.S. economic output and providing 20 million advertising-supported jobs. As such, TAC notes, “a tax on advertising would undermine U.S. economic growth.”
TAC’s memo states that although the deductibility of advertising costs is not considered one of the five or six “big levers” that are critical to upcoming tax deals, it is “potentially mid-sized,” which means that industry needs to continue advocacy efforts “strongly and immediately,” because the next few weeks “will be crucial to legislative tax reform efforts.”
The Coalition is holding a member call on this topic on Sept. 20, but Kamp encourages members “to contact your member of Congress ahead of the call.” He noted that the current timeline for movement on this issue “is exceedingly short and there is no time for an orderly process,” and stated that members should make sure that “your constituent voice will be heard.”
Coalition members seeking additional information about the Sept. 20 call can contact John Kamp at firstname.lastname@example.org.