Lawmakers Caution Against Taxing Advertising

April 27, 2017

The Honorable Paul Ryan
Speaker of the House
U.S. House of Representatives
Washington, D.C. 20515

The Honorable Nancy Pelosi
Minority Leader
U.S. House of Representatives
Washington, D.C. 20515

Dear Mr. Speaker and Madame Leader:

The 115th Congress holds the promise of streamlining the corporate tax code in order to achieve lower rates for America’s businesses and eliminate tax loopholes and special preferences. We look forward to working with you on these efforts to bolster job creation, stronger wages, and economic growth, and respectfully ask that you maintain the current tax treatment of advertising as a fully and immediately deductible business expense. The potential for strengthening our economy through tax reform would be jeopardized by any proposal that imposes an advertising tax on our nation’s manufacturing, retail, and service industries.

Advertising has been accorded the same treatment as all other regularly occurring business expenses, such as employee wages, rent, utilities and office supplies, throughout the 114-year life of the tax code. Any measure that would tax advertising — and therefore would make it more expensive — cannot be justified as a matter of tax or economic policy. Moreover, such a proposal would run counter to a major goal of tax reform agreed upon by virtually all policymakers: to simplify the tax code. For example, promoting a tax on advertising while pursuing full and immediate expensing of buildings and equipment furthers the irregularities and confusion present in our current tax system.

Virtually every business in America relies on advertising to inform potential customers, generate sales, and support workers across our nation. A study by the economic consulting firm IHS Economics and Country Risk found that in 2014, advertising supported 20 million U.S. jobs and $5.8 trillion in U.S. sales. Significantly, the study showed that every dollar of advertising spending generates $19 of economic activity, and that advertising contributes to 19 percent of our nation’s GDP. Advertising also is responsible for supporting the high-quality news, information, and entertainment that is a cornerstone of our democracy and upon which our constituents rely.

We welcome the important challenges of fixing our country’s tax code and strengthening America’s ability to compete economically around the globe. As this Congress delves deeper into these issues over the coming year, we ask that any changes in our tax system be meaningful, economically sound, and do not threaten the impacts of advertising on jobs and the economy.

Sincerely,

Kevin Yoder
Member of Congress

Eliot Engel
Member of Congress

Alma Adams
Member of Congress

Don Bacon
Member of Congress

Joyce Beatty
Member of Congress

Sanford D. Bishop, Jr.
Member of Congress

Rod Blum
Member of Congress

Anthony Brown
Member of Congress

G.K. Butterfield
Member of Congress

Rick W. Allen
Member of Congress

Jim Banks
Member of Congress

Gus Bilirakis
Member of Congress

Marsha Blackburn
Member of Congress

Mo Brooks
Member of Congress

Julie Brownley
Member of Congress

Ted Budd
Member of Congress

Salud Carbajal
Member of Congress

Tony Cardenas
Member of Congress

Earl L. 'Buddy' Carter
Member of Congress

Wm. Lacy Clay
Member of Congress

Chris Collins
Member of Congress

John Conyers Jr.
Member of Congress

Rick Crawford
Member of Congress

Michael E. Capuano
Member of Congress

André Carson
Member of Congress

David N. Cicilline
Member of Congress

Mike Coffman
Member of Congress

James Comer
Member of Congress

Kevin Cramer
Member of Congress

Rodney Davis
Member of Congress

Peter A. DeFazio
Member of Congress

Theodore E. Deutch
Member of Congress

Anna G. Eshoo
Member of Congress

Elizabeth H. Esty
Member of Congress

John J. Faso
Member of Congress

Mike Gallagher
Member of Congress

Vicente Gonzalez
Member of Congress

John K. Delaney
Member of Congress

Sean Duffy
Member of Congress

Adriano Espaillat
Member of Congress

Blake Farenthold
Member of Congress

Trent Franks
Member of Congress

Bob Gibbs
Member of Congress

Garret Graves
Member of Congress

Gene Green
Member of Congress

Brett Guthrie
Member of Congress

Alcee Hastings
Member of Congress

Eleanor Holmes Norton
Member of Congress

Darrell Issa
Member of Congress

Hank Johnson
Member of Congress

John Katko
Member of Congress

Glenn Grothman
Member of Congress

Colleen Hanabusa
Member of Congress

Jody Hice
Member of Congress

Richard Hudson
Member of Congress

Hakeem Jeffries
Member of Congress

David P. Joyce
Member of Congress

William R. Keating
Member of Congress

Ruben J. Kihuen
Member of Congress

Ann McLane Kuster
Member of Congress

Doug Lamborn
Member of Congress

Sheila Jackson Lee
Member of Congress

Dave Loebsack
Member of Congress

Michelle Lujan Grisham
Member of Congress

Carolyn Maloney
Member of Congress

Derek Kilmer
Member of Congress

Darin LaHood
Member of Congress

Leonard Lance
Member of Congress

Ted W. Lieu
Member of Congress

Nita M. Lowey
Member of Congress

Stephen F. Lynch
Member of Congress

Tom Marino
Member of Congress

Roger Marshall
Member of Congress

Michael T. McCaul
Member of Congress

Grace F. Napolitano
Member of Congress

Tom O’Halleran
Member of Congress

Scott Perry
Member of Congress

Chellie Pingree
Member of Congress

Jamie Raskin
Member of Congress

Doris Matsui

Member of Congress

Grace Meng
Member of Congress

Richard M. Nolan
Member of Congress

Stevan Pearce
Member of Congress

Collin C. Peterson
Member of Congress

Bruce Poliquin
Member of Congress

Kathleen M. Rice
Member of Congress

Cedric L. Richmond
Member of Congress

Dennis Ross
Member of Congress

C.A. Dutch Ruppersberger
Member of Congress

Adam Schiff
Member of Congress

David Scott
Member of Congress

Pete Sessions
Member of Congress

Hal Rogers
Member of Congress

Ed Royce
Member of Congress

Mark Sanford
Member of Congress

Kurt Schrader
Member of Congress

F. James Sensenbrenner
Member of Congress

Lamar Smith
Member of Congress

Elise M. Stefanik
Member of Congress

Scott Tipton
Member of Congress

Paul Tonko
Member of Congress

Michael R. Turner
Member of Congress

Nydia M. Velázquez
Member of Congress

Greg Walden
Member of Congress

Steve Stivers
Member of Congress

Dina Titus
Member of Congress

Dave Trott
Member of Congress

Juan Vargas
Member of Congress

Tim Walberg
Member of Congress

Peter Welch
Member of Congress

Brad Wenstrup
Member of Congress

Rob Woodall
Member of Congress

Lee Zeldin
Member of Congress

Eddie Bernice Johnson
Member of Congress

David Rouzer
Member of Congress

Maxine Waters
Member of Congress

Al Lawson
Member of Congress

Frederica S. Wilson
Member of Congress

Don Young
Member of Congress

Daniel M. Donovan, Jr.
Member of Congress

Peter King
Member of Congress

Bobby L. Rush
Member of Congress

Stacey E. Plaskett
Member of Congress

Barbara Lee
Member of Congress