When I sat down to write this month’s CEO column, I knew I wanted to talk about something that excited passions and the intense interest of our members. Tax reform immediately sprang to mind.
Last month, the White House released a tax plan, but it left more questions than answers. Now, Congress holds the fate of real, reputable, and trusted news in their hands. On May 18th, to get the ball rolling it officially embarked on the long-awaited attempt at comprehensive tax reform with a hearing, “How Tax Reform Will Grow the Economy and Create Jobs.”
It is vital to remember that members of the news media industry utilize their deductions to reinvest in the quality journalism that every American relies on. The News Media Alliance agrees that creating a “pro-growth” simplified system would benefit individuals and corporations alike. As members of Congress proceed, we ask them to continue providing certain tax incentives to the news media industry that allow companies to reinvest in the tremendous resources necessary to produce the verifiable, high-quality journalism that citizens trust – be it covering the local School Board or the White House.
Past tax reform proposals have called to limit or eliminate the advertising deduction to offset a lowered corporate tax rate. The News Media Alliance unwaveringly supports maintaining the current treatment of advertising costs as an immediately deductible ordinary and necessary business expense. Advertising creates 20 million jobs and adds $5.8 trillion to the U.S. economy, benefiting all levels of economic growth from national manufacturers to local businesses to newspapers. If Congress were to alter this deduction it would distort business decisions and undermine the pro-growth goals of any new bill.
There is a public interest in newspaper companies reinvesting in high-quality, vetted news. Americans may be receiving their news from more sources than ever before, but studies show that news received by premium publishers has a higher level of trust among consumers. That trust comes from knowing that professional journalists and publishers are driven by an ethical standard to report the truth. Gaining the trust of their readership increases subscriptions and has a positive impact on overall revenue. The aforementioned tax deductions allow for newspapers to continually reinvest in the quality news that communities rely on.
The Alliance will continue to advocate for the current treatment of ad tax, Sec. 199, which allows us to write off costs associated with printing the paper, and Sec. 173, the circulation deduction for expenses that help increase subscriber growth. We pride ourselves on supporting real news—our members—so you can trust we will continue to support and champion the industry on Capitol Hill.
David Chavern serves as President & CEO of the News Media Alliance. Chavern has built a career spanning 30 years in executive strategic and operational roles, and most recently completed a decade-long tenure at the United States Chamber of Commerce.