Should Advertising Remain a Tax-Deductible Business Expense?

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dc.contributor.advisorDaly, Herman E.en_US
dc.contributor.authorWengrover, Sally Ruthen_US
dc.contributor.departmentPublic Policyen_US
dc.contributor.publisherDigital Repository at the University of Marylanden_US
dc.contributor.publisherUniversity of Maryland (College Park, Md.)en_US
dc.date.accessioned2009-07-02T05:38:13Z
dc.date.available2009-07-02T05:38:13Z
dc.date.issued2009en_US
dc.description.abstractAdvertising expenses have been deductible ever since the income tax was enacted in 1913. Over the years, however, a number of analysts have questioned advertising's tax status. According to some, advertising creates intangible capital and should, therefore, be capitalized and amortized like other capital assets. According to other analysts, advertising does more to reduce welfare than to augment it; therefore, the deduction should be completely denied. Advertisers and their supporters, on the other hand, maintain that the deduction is entirely reasonable. This dissertation addresses some of the legal controversies involving the deduction and examines some of advertising's economic psychological, sociological and ecological effects. In Part I, Chapter 1 introduces the research question and debates the welfare implications of ad-induced economic growth. Chapter 2 considers whether advertising is, in fact, an "ordinary and necessary business expense" that is entitled to a tax deduction. Although advocates for the deduction claim that it is both ordinary and necessary, some critics argue that the deduction is, in fact, a subsidy that shifts more of the tax burden to individual taxpayers. Part II is devoted to the economic effects of advertising. Chapter 3 discusses advertising's impact on demand for the output of an individual firm, a particular industry, and all industries combined. Chapter 4 examines the effect of advertising on the competitive model; Chapter 5 evaluates advertising's influence on innovation, employment, and savings; and Chapter 6 considers the economic impact of advertising on the media. The focus in Part III is on advertising's influence on well-being. Chapter 7 examines ways that advertising affects the well-being of individuals and society. Chapter 8 surveys the impact of ad-induced materialistic values on the environment. Chapter 9 looks at a number of costs and benefits that are associated with advertising, discusses potential obstacles to changing advertising's tax status, and offers recommendations for policymakers.en_US
dc.format.extent3624703 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.urihttp://hdl.handle.net/1903/9134
dc.language.isoen_US
dc.subject.pqcontrolledPolitical Science, Public Administrationen_US
dc.subject.pqcontrolledEnvironmental Sciencesen_US
dc.subject.pqcontrolledEconomics, Generalen_US
dc.subject.pquncontrolledadvertisingen_US
dc.subject.pquncontrolledecological economicsen_US
dc.subject.pquncontrolledenvironmental policyen_US
dc.subject.pquncontrolledmass mediaen_US
dc.subject.pquncontrolledmaterialismen_US
dc.subject.pquncontrolledtax policyen_US
dc.titleShould Advertising Remain a Tax-Deductible Business Expense?en_US
dc.typeDissertationen_US

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