Advertising Deductibility: For the Sake of Speech

 The “Tax Cuts and Jobs Act,” introduced amid great fanfare on Nov. 2, has now been passed by the U.S. House of Representatives along an essentially party-line vote. The Senate’s version, introduced Nov. 9, is still undergoing intense scrutiny as groups from every quarter weigh the bill’s proposed cuts in tax rates versus the elimination of certain deductions, credits, and other tax breaks.

As ideas for reforming the tax code were tossed around in recent months and even years, one proposal – or some variation of it – would surface from time to time. This was the idea that the tax deduction for business advertising expenses should be eliminated.

This has always been an ill-considered idea (as we shall discuss below), and thus we were relieved that it did not find its way into the new tax bills of either the House or Senate. But since these bills are only the opening salvos in the difficult battle to revise the tax code, it would be worthwhile to examine why this ad-related provision should not be a part of the measure that finally reaches the president’s desk.

Continue reading “Advertising Deductibility: For the Sake of Speech”

Repealing Media Ownership Regulations: It’s About Time

FCC Chairman Ajit Pai has proposed the most reasonable of actions: repealing or revising 40-year-old media ownership rules that long ago outlived any marginal usefulness they might’ve once had.

This should be a no-brainer. But, Washington being what it is, entrenched interests and politicians bent on maintaining the status quo for their own purposes have pilloried Pai for trying to do something that should’ve been done decades ago.

First, the facts. On Oct. 26, Chairman Pai released an Order on Reconsideration and Notice of Proposed Rulemaking. This proceeding seeks to accomplish the following:

  • Eliminate the Newspaper/Broadcast Cross-Ownership Rule;
  • Eliminate the Radio/Television Cross-Ownership Rule; and
  • Revise the Local Television Rule to eliminate the Eight-Voices Test and to incorporate a case-by-case review provision in the Top Four Prohibition.

The proceeding would also seek to eliminate the attribution rule for television Joint Sales Agreements; retain the disclosure requirement for commercial television Shared Services Agreements; keep the Local Radio Ownership Rule; and create an incubator program to encourage new and diverse voices in the broadcast industry.

Continue reading “Repealing Media Ownership Regulations: It’s About Time”

Decline of Legacy Media, Rise of the Conservatives?

For the legacy news media, the bad news just keeps on coming.  In recent days, for instance, the Pew Research Center released a piece titled “The Declining Value of U.S. Newspapers,” chronicling the extraordinary decline in the purchase and sale price of major U.S. dailies.

Some of the examples given are so extreme they look like misprints.  The New York Times Co., for instance, purchased The Boston Globe and Worcester Telegram & Gazette for a little over $2.2 billion, and sold them both in 2013 for $71 million – a valuation change of minus 96 percent!

Not far behind are newspapers like the The Philadelphia Inquirer/Daily News, the Chicago Sun-Times and the (Minneapolis) Star Tribune, all of which themselves sold in 2011 and 2012 for around 90 percent less than their earlier purchase prices.

Nor is the challenge to newspapers just an American phenomenon.  Recognizing the importance of the American media, and its similarity to their own challenges, the World Association of Newspapers and News Publishers (WAN-IFRA) is holding its annual World News Congress in Washington June 1 to June 3, only the fifth time in the past 60 years that they have held this event in the United States.

A WAN backgrounder puts the matter succinctly: “The 2015 [Congress] comes at a time when independent news media are under enormous pressure, one that threatens their societal role as the provider of credible news and information to citizens so they can make informed decisions in democratic societies.”  >> Read More