Taxed to Talk

Congress is always looking for new and sneakier ways to fill it’s pockets with our hard-earned cash. This time it has started to look at parts of former Michigan GOP Congressman Dave Camp’s failed “Tax Reform Act of 2014.”

Unfortunately, this isn’t the kind of simplied tax-reform being talked about by President Trump and wanted by the American public. No, Camp’s proposal would restructure the taxation of advertising from a normal — a 100-percent deductible business cost — to one that is only 50 percent deductible, with the rest being amortized over the course of a decade.

The only time in U.S. history that a federal advertising tax was impose was during the Civil War. In the 1980s, Florida briefly imposed one, and it led to the immediate loss of 50,000 jobs and $2.5 billion in personal income and was repealed after six-months.

And aside from some exceptions related to false and misleading content, the federal government has for the most part respected the constitutional mandate of the First Amendment to leave advertising alone. That’s why the Supreme Court, overturned Valentine v. Chrestensen (1942) with writing that “the Constitution imposes no restraint on the government as to the regulation of ‘purely commercial advertising…’”

Thirty-five-years later, in 1977, the Supreme Court reaffirmed its decision in Bates v. State Bar of Arizona, that free speech includes paid advertisements or solicitations to pay or to give money. The court explained:

“‘Advertising, though entirely commercial, may often carry information of import to significant issues of the day. And commercial speech serves to inform the public of the availability, nature, and prices of products and services, and thus performs an indispensable role in the allocation of resources in a free-enterprise system. In short, such speech serves individual and societal interests in assuring informed and reliable decision-making.'”

The First Amendment is supposed to apply to all Americans — not only those who can afford to pay a federal tax on it.

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