American Society of Magazine Editors

Republican VP Candidate’s Remarks to MPA Board; Ryan Budget Plan Could Have Deductibility Implication

In April, when Representative Paul Ryan (R-WI) spoke at the annual MPA Washington Meeting,  he deftly dodged questions about whether he would join Republican presidential candidate Mitt Romney as his running mate.  With only three weeks before the Republican convention in Tampa, we now know the answer is yes.

As Chairman of the House Budget Committee, Representative Ryan has often been in the spotlight for his aggressive approach to fiscal reform, and has authored a far-reaching tax and spending reduction plan, a plan both applauded and criticized. A core principle of Representative Ryan’s plan is the lowering of overall tax rates in exchange for the elimination or scaling back of almost all deductions. Those who attended the April MPA meeting with Representative Ryan will recall that he engaged that day in a candid question and answer session about advertising expense deductibility.

MPA has long argued that advertising should be considered a “usual and customary” business expense. Further, for media companies the loss from the elimination or amortization of the deduction would likely not be adequately offset by a reduction in the overall tax rate. Jettisoning advertising deductibility as it stands could have far reaching economic implications and trigger a significant reduction of advertising to offset costs. This is a priority issue for MPA.