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Assaults on Ad Revenue Continue in Washington

Magazine article Editor & Publisher

Assaults on Ad Revenue Continue in Washington

Article excerpt

LEGISLATION THAT LIKELY would reduce advertising spending and administrative crackdowns on advertising practices are distinct possibilities in the coming months, a trade executive has warned.

The advertising industry -- newspapers, ad agencies and advertisers -- must remain vigilant to stave off federal legislation and regulations, said Jeffrey L. Perlman, vice president of government affairs at the American Advertising Federation.

"Congressional bills affecting the advertising community are springing up all over," Perlman said in an address at the annual sales conference of the California Newspaper Advertising Executives Association in La Quinta.

He cautioned the industry against becoming complacent because of lobbying efforts that have helped defeat such legislation in the past.

Congressional advocates of bills to tax advertising revenue "may be down but they're not out," Perlman said. "At some point, they'll be back. They always are. They can afford to lose several times, but if we lose once, it will be devastating."

Perlman noted that AAF, a Washington-based umbrella organization that has newspapers, ad agencies and major advertisers as members, believes that few legislators or regulators understand the economic contributions of advertising.

"But there can be no doubt that newly proposed draconian ad restrictions would decrease the amount of advertising and slow the economy," he said.

Perlman, a lawyer, said new assaults on ad revenue are under way. Recently, a member of the Select Revenue Subcommittee of the House Ways and Means Committee asked whether a portion of a company's advertising expenses should be amortized, he said.

"We also faced a Congressional Budget Office report, which indicated the government could make an $18 billion profit over five years with an advertising tax," Perlman said. "Easy money."

The advertising community, including newspapers, successfully rallied to defeat such proposals, but there are more to come, he said.

Iowa Sen. Tom Harkins bill to disallow 20% of the tax deduction for tobacco advertising narrowly failed last year, but he has reintroduced it with the disallowance increased to 50%, Perlman pointed out.

Another Democrat, Sen. …

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