A Trump presidency has mixed ramifications for the advertising industry, according to a member bulletin published by the 4As this afternoon.
On the plus side, upcoming overtime rules proposed by the U.S. Dept. Of Labor might get a second look from the incoming Trump Administration given the president-elect’s position that burdensome governmental regulations on businesses ought to be reduced. And future Supreme Court Appointees from PresidentTrump are likely to support the doctrine of free commercial speech.
But tax policy is likely to change or at least be re-examined and Trump has been an advocate of reducing (if not eliminating) certain corporate tax deductions including full-deductibility of advertising as a necessary business expense. The issue is likely to be “the first item of business that the advertising community has with the new government,” according to the 4A’s bulletin.
Here’s the text of the bulletin:
Yesterday’s election produced one of the most powerful political upsets in the nation’s history.
The election of Donald J. Trump as President, with the return of a Republican-controlled Senate and House, sets the stage for a seismic shift in government focus. This shift will take place in the presence of an electorate that could not have been clearer in their rejection of the recent history of gridlock in Washington and in their demand for government action that will improve their lives.
Against that backdrop, it is now entirely possible that President-elect Trump, Senator McConnell, and Speaker Ryan will coalesce on an action agenda that will justify their stewardship over the next four years. Much of that agenda will involve broad issues like national security, immigration, infrastructure, and healthcare. But, even at this early point, it is possible to identify action items that could have a serious impact on the advertising community. Among these are:
President-elect Trump campaigned vigorously on the need to reform the nation’s tax code–both individual and corporate. In taking this stance, he endorsed the House Blueprint on Tax Reform as a base from which to begin the reform process. This blueprint importantly calls for a re-examination of all existing corporate tax deductions, including the full deductibility of advertising as a necessary business expense. With such a shared vision in place, it is natural to expect quick action on this item. It is likely that protection of full deductibility will be the first item of business that the advertising community has with the new government.
Reduced Regulatory Oversight
President-elect Trump campaigned aggressively on the need to eliminate government regulations which, he perceives, are a counterproductive burden on American business. In this belief, he is in full agreement with the Republican Senate and House. It is natural to expect that the regulatory burden typified by the Labor Department’s upcoming overtime rules or the FCC’s new broadband privacy rules will be eased over the next four years.
The unfettered ability of a product to tell its story in advertising to the public is protected by the First Amendment. In rulings on this right, the Supreme Court has defined the doctrine of commercial speech which has protected the industry for decades. The likelihood that President-elect Trump will appoint conservative Justices, who typically support the right of commercial speech, should provide continuing protection of that right going forward.
In the weeks ahead, the 4A’s in concert with other members of the extended advertising community will begin discussions with new appointees of the Trump administration to gain a more granular understanding of what policies the new Administration is likely to pursue and how those new policies might impact advertising. As we develop a clearer understanding of where they want to go, we will periodically post our members on the direction ahead. In the meantime, if you have any questions, please contact Dick O’Brien (email@example.com) or Peter Kosmala (firstname.lastname@example.org) in the 4A’s Washington office.”