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TRUTH IN ADVERTISING?

October 29, 2013

TRUTH IN ADVERTISING?

You don’t have to have a PHD in Economics to understand that the ultimate consumer (you and I) pay for all the costs of production, distribution and sale of goods and services in the marketplace from beginning to end, ranging from a can of peaches to an internet connection. From the orchards that raises the peaches, through the cannery, to the wholesaler and ultimately, the retailer, several economic actors are involved along the trail from orchard to table. Each has its own role to play, and each must make a profit on its participation in the peach business.

With that in mind, and as I watch the World Series and other such events, I am always struck by the announcements before play begins that “This World Series game is brought to you by Master Card,” or “This after-game commentary is brought to you by Toyota, or Budweiser, or . . . .”

This is not the case at all. As can be seen in the first paragraph of this essay, the World Series game and/or commentary is brought to you by YOU. The game is brought to you by money you spent for Budweiser or on Toyotas etc., and that was not the end of your cost. The money you spent that Budweiser uses to pay for advertising is deductible from taxes to Budweiser as “an ordinary and necessary business expense,” which means that you are hit again, because the money Bud deducts from payment to our treasury for advertising is money you have to make up to our treasury, and that includes taxpayers who do not buy Budweiser products but nevertheless are forced to help Budweiser reduce its taxes. Imagine the ire of tee-totaling preachers upon learning of this!

To top it all off, neither advertisers nor TV and radio channels even own the airwaves over which these events are broadcast. You do; the government licenses rights to use these airwaves on your behalf to broadcasting corporations.

So let’s see, now. The game is brought to you by you, but the advertising costs are paid to corporate broadcasters who do not own the airwaves they use – you own them. The advertisers take tax deductions (from money you paid through consumption of their goods and services) which increases your taxes or liability to pay them to the extent such deductions are taken. Even taxpayers who did not consume such advertisers’ goods or services must pay or be liable to pay such taxes lost to our treasury.

Is there something wrong with this picture? Is the public interest represented in this tangle of commercial interests? Why are we paying someone else’s taxes, directly or indirectly? Is there no end to corporate welfare? Why am I as a non-consumer of Budweiser products nevertheless forced to pay for Budweiser’s advertising expenses either in whole or in part? I could rant on and on, but readers will get the point, and it is this: The internal revenue code with its hundreds of corporate loopholes is heaven-sent to corporate America. Many corporations make huge profits and pay little or no tax. GE, for instance, one of the world’s biggest corporations, made billions of dollars in 2010, and not only did not pay any income tax, it received a REFUND of $3 billion dollars! That’s a lot of dividends and executive bonuses.

Guess who had to make up that bonanza to GE? You and I. Three billion dollars buys a lot of meals on wheels and Head Start instruction, but those programs remain underfunded in favor of payoffs to corporate America via loopholes in the internal revenue code, a code in great need of reform. GERALD  E

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2 Comments
  1. billy1926 permalink

    – – – and how did these loopholes originate? Do you suppose my congressman had a hand in this?

    • Of course not! All congressmen and women insist that corporate America pay its fair share of the tax load; it’s just that they have a different definition of “tax load” than I. GE, for instance, not only had zero load in 2010 – you and I increased our load in order to offload theirs. My advice: vote for all incumbents; they are just the best! (signed, C of C, ALEC, Kochs et al. Hot here – looking for company to take down to the Glades to kick gators etc. GES

      On Tue, Oct 29, 2013 at 9:15 AM, elderblogger

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