Ad tax threat brings publishers to Washington

February 26, 2015

WASHINGTON—The looming threat of a federal advertising tax—proposed in the form of denying newspaper advertisers the right to fully deduct expenses—is bringing newspaper publishers to Washington March 19 to convince Congress that the tax would weaken local economies.

The most recent study by Global Insight, the internationally recognized economist group, shows that every dollar of advertising spent is responsible for more than $20 of economic activity. But the 114th Congress is eyeing the ad tax as a way to pay for a lower corporate tax that it hopes will entice multinational corporations to repatriate off-shore dollars and stop buying up small foreign companies so they can claim a new headquarters and avoid U.S. income tax.

National Newspaper Association President John Edgecombe Jr., publisher of The Nebraska Signal in Geneva, NE, called the tax proposal the most threatening initiative from Washington in three decades.

“The federal government has looked at this tax before and wisely declined to adopt it. But this time, the threat has been endorsed by some liberals and conservatives alike as they have forgotten the lesson of their predecessors: taxing advertising puts a heavy foot on the U.S. economic brake,” Edgecombe said. “It is hard to imagine a way Washington could widen the gap between Main Street and Wall Street more effectively than by taking money from our local advertisers to hand off to major corporations.”

He called for publishers who have not yet awakened to the threat to assemble in Washington to make an effective show of strength against the proposal, which is under consideration in both House and Senate taxing committees.

The We Believe in Newspapers Leadership Summit also features an evening event at the National Press Club with ABC correspondent Jeff Zeleny, a briefing by new Postmaster General Megan Brennan and an opening reception March 18 at the National Postal Museum, a Smithsonian institution that is building a new exhibit featuring industries that use the mail. Registration information is available at www.nnaweb.org.

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