Of Advertising

 

“One tax reform would cut at the root of the advertising culture: disallowing firms to write off advertising as a business expense. (There is nothing new in the idea of taxing costs.  For example, payroll taxes are taxes on the cost of employing labor.)  Firms would have to weigh up whether the expected benefit from advertising their product exceeded the cost of paying the tax.  Firms that advertise might have to put up the prices of their goods and services, but this would have the desirable result of reducing their sales.  Necessities need little advertising, so the goods most affected would be those with the weakest link to needs.  Such a tax would damage the financing of commercial television, which currently gets 49% of its revenue worldwide from advertising.  This means that more money would have to come from viewer subscription (currently 42%), or from television licence fees and public funding, which now finance the (shrinking) share of public service broadcasting.  Internet advertising could be taxed in the same way.”

—Robert Skidelsky and Edward Skidelsky, How Much Is Enough?: Money and the Good Life, 2012

 

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