Tax Bill Is Good News for Life Sciences and Marketing
Although it's a long way from the president's desk, the Tax Cut and Jobs Act of 2017 contains plenty of good news for the life sciences industry and its marketing partners.
Most importantly for marketers, neither the House Ways and Means nor the Senate Finance Committee versions the bill contain the oft-proposed reduction of the deductibility of marketing costs for client expenses, which circulated for months in the drafting stage and was the subject of significant lobbying by the Coalition for Healthcare Communication, the 4As, and The Advertising Coalition.
Thanks to many of you who wrote to your member of Congress explaining why the provision would harm jobs, medical education, comms, and marketing.
However, we're not out of the woods yet. The proposals include several other pay-fors that are popular, including the deductions for state and local taxes and for all mortgage interest. The lobbying armies are out in full force to save these deductions, and the $168 billion revenue estimate for the marketing tax provision will be a target. Indeed, at press time, Sen. Claire McCaskill (D-Mo.) had filed an amendment to eliminate the deduction on consumer drug marketing.
Thus, we and The Advertising Coalition are staying focused on Capitol Hill and may be back asking you to send another round of calls, emails, and letters to defend our industry. The stakes are high. $168 billion is real money even in Washington, and per our best estimates, reducing the deduction would dampen spending on marketing by 12% in just the first three years after passage.
Meanwhile, the industry as a whole does well in the current draft, which includes a reduction of the corporate tax rate from over 30% to 20%, and favorable tax rates on foreign profits now “captured” overseas.
Let's keep up the pressure and hope that if and when the tax bill is enacted, favorable provisions in the current draft prevail.
John Kamp is the executive director at the Coalition for Healthcare Communication.