Tax plan slaps new tax on businesses, Internet companies affected disproportionately
WASHINGTON- Sen. John McCain (R-AZ) has made good use of the Internet as a campaign tool, using it as a key issue and also using it to raise money. But the fine print of McCain\’s tax plan suggests he will slap a new tax on businesses, resulting in a disproportionate burden on dot.com companies.
Grover Norquist, President of Americans for Tax Reform, issued the following statement regarding McCain\’s plan to implement a $28 billion tax increase over five years on businesses:
"Chairman McCain, who has been a champion of those who wish to see the Internet left alone, now seems to be altering his position on Internet taxes.
"McCain\’s tax plan includes a provision to raise taxes on advertising. Since the income tax began, businesses have been allowed to deduct the full costs of advertising as a business expense. Under McCain\’s plan, businesses would get an immediate deduction for just 80- percent of advertising costs. The deduction for the remaining 20 percent would be would be spread over the following four years. According to the Congressional Budget Office, the result is a $28 billion tax increase.
"As Michael Dell, of Dell Computers said, \’For many Internet companies, advertising is their store because they have no brick and mortar retail locations.\’
"Therefore, since many Internet companies pour a disproportionate amount of their capital into advertising to drive Internet users to their website, they will bear the brunt of this particular provision in the McCain plan.
"Seventeen dot.com companies spent more than $2 million apiece for one 30-second commercial during the Super Bowl. Because these companies don\’t have brick and mortar retail locations, they would be disproportionately hurt by the McCain tax plan since a large portion of their business expenses go towards advertising."