Legislative Report | Winter 2017 January 15
AAF Government Report
Clark Rector Jr., Executive Vice President of Government Affairs
Advertising Day on the Hill
AAF’s Advocacy and Action: Advertising Day on the Hill is fast approaching. This exciting event will be held on Thursday, March 30 with a preconference dinner on Wednesday evening, March 29. AAF’s unique strength in Washington, DC is as a grassroots organization and the Day on the Hill is a time for those grassroots to be heard. Attendees will be briefed on the issues by policy experts, hear from lawmakers and regulators and walk the Halls of Congress delivering the advertising industry’s message.
The Day on the Hill is FREE to all AAF members, but registration is required. Sponsorship opportunities are available as well. Register early and come to Washington, DC in March to make your voice heard.
President and Congress Focus on Tax Reform
President Donald Trump and top lawmakers have identified comprehensive tax reform as a priority issue as the new Administration and Congress begin their work together. At this point in time, proposals on both ends of Pennsylvania Avenue are expressed only in broad generalities.
President Trump has pledged to lower the corporate tax rate and provide simplification by eliminating many of the preferences and deductions that litter the code. However, no specifics have been given as to which preferences and deduction will be limited.
In the House of Representatives, Speaker Paul Ryan has released his “Better Way” agenda that includes a “Blueprint for bold pro-growth tax reform.” The Blueprint proposes to lower the corporate tax rate from 35 percent to 20 percent and to shift the code, “from the current outdated ‘worldwide’ regime to a ‘territorial’ system with competitive low tax rates.” How this would impact advertising is being studied, but obviously will depend on many of the plan’s details that have not yet been released and/or determined.
AAF has met with both Republican and Democratic tax staff on the House Ways and Means Committee and will continue to forcefully advocate on behalf of maintaining the current tax statues of advertising and a fully deductible normal and necessary business expense.
Senator Targets DTC Advertising
During a recent Senate consideration of budget reconciliation, Senator Al Franken, D-Minn., considered introducing an amendment to disallow the tax deduction for the direct-to-consumer advertising of pharmaceutical products. Advertising industry representatives quickly contacted Senators to urge opposition to the amendment. Senator Franken ultimately chose not to offer the proposal. The Senator has in the past sponsored legislation to eliminate the deduction for DTC advertising so we anticipate he may try to raise the issue again.
FTC and FCC Receive New Leaders
Commissioners Maureen Ohlhausen of the Federal Trade Commission and Ajit Pai of the Federal Communications Commission have been named as the new Chairs of their respective agencies.
The elevation of Chairman Pai is particularly significant for the advertising industry as he was a strong opponent of previous Chairman Tom Wheeler’s proposed new privacy rules for broadband providers. AAF was opposed to the proposed rules which would expand the definition of “sensitive data,” to include web browsing and application use data when linked to a device alone. Sensitive data requires a consumer’s opt-in to use or share. This is would be a significant departure from accepted industry practice and customer expectation that the collection and use of web viewing and application use data for advertising purposes is subject to an opt-out choice. The rules also would have applied only to Internet Service Providers, only one small part of the Internet ecosystem.
AAF and many of our industry colleagues have filed a petition for reconsideration with the FCC asking for a withdrawal of the rules. We have also signed a letter sent to Congressional leaders asking Congress to enact a Notice of Disapproval.
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