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Proposed Pennsylvania Ad Tax Would Be a Dubious First in Nation

In Ad Tax, Competition, Rules&Regs on February 23, 2010 at 4:05 pm

Pennsylvania would make history if the Ad Tax — part of the Governor’s 74 count hit list on current, so-called “non-essential” goods and services — were to pass. And stay on the books. That’s because Florida, searching for “soft targets” to tax, actually passed such a measure several years ago. But the economic fallout was immediate and the devastation spilled beyond the imagination of the budget makers.

As a result, the Ad Tax was swiftly repealed. But in dire budgetary times, states succumb to collective amnesia or willfully ignore the critical Florida Ad Tax Lessons: Advertising has a demonstrable multiplier effect in the economy. Each dollar spent on advertising compounds activity across multiple direct and indirect tiers of the economy, in some cases ten-fold and more. The analysis is a Must Read.

The flip side of that complex equation is the chain reaction that follows decreased spending on Advertising: Lost Sales and Lost Jobs. And as we’ve learned from our Community Paper Publishers here in Pennsylvania, an Ad Tax will lead to steep reductions in Advertising from the Mom & Pop merchants already struggling on Main Street.

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  1. […] In Ad Tax, Competition, Rules&Regs on March 2, 2010 at 6:44 pm In my last post on the perils of Taxing Advertising, I touched on the “multiplier effect” of advertising: Each dollar invested yields a […]

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