Several weeks ago, Assistant Publisher Brent Cruikshank received a phone call from Tonda Rush, director of public policy for the National Newspaper Association (NNA).

She called to see if Brent would be able to attend a scheduled meeting in Congressman David Schweikert’s office to urge him to vote against a bill that may contain a tax on advertising.

I was in California when Brent got the call from Tonda, who I knew from my years of involvement with the NNA.

Brent thought she meant Schweikert’s Washington office. I called Tonda when I returned to the office. She told me the meeting was in Schweikert’s Scottsdale office. I told her I would need some background information on the bill and I would go along with Brent and talk on behalf of community newspapers.

I told her I have known the Congressman since his days when he was President of the Young Republicans Club at Saguaro High School.

Schweikert, a long-time Fountain Hills resident, is a member of the House Ways and Means Committee.

Congress is facing a major task as it tackles the daunting effort to reform the federal tax code.

The last major revision was during the Reagan administration. Revision of the tax code is complicated by its many exemptions, deductions, write-offs, depreciations and other variables.

The House Ways and Means Committee, chaired by Rep. Kevin Brady, R-TX, has set out to do this by year’s end.

By reducing or eliminating many of these deductions, Congress will have to find new revenue sources to fund the government’s operation, or steep budget cuts would have to be made.

The worry for media is that one option mentioned could be a tax on advertising. Eliminating or trimming back the deduction allowed for advertisers would net a substantial tax revenue over the short term.

Depending on the degree of change, the federal revenue could be substantially increased over the short term, even though some say in the long term it could do more harm than good.

Brent and I met with members of the Advertising Coalition for lunch prior to the meeting with Schweikert to discuss strategy. Others invited included Jim Davidson, who heads the Advertising Coalition, a consortium of advertising-based organizations. He is recognized as a long-time Washington policy expert. Others at the meeting were Anita Helt, president of KNXV-TV, Carl Levy, regional manager of government relations for McDonald’s; Mi-Al Parrish, publisher of The Arizona Republic; Stephanie Walaszek, vice president of the Phoenix Ad Club and Art Brooks, president and CEO of the Arizona Broadcasters Association.

Schweikert presented the Phoenix area representatives of The Advertising Coalition with opportunities and challenges. Schweikert is a thoughtful reader of technical literature and invited the group to to meet with him in Washington to review the Stigler and Arrow study and the IHS research in an effort to better understand the challenge that a tax on advertising would present. Walaszek said, “Advertising is a local engine for the economy and we have data that underscores its performance. Advertisers need to know what is in this proposed budget and oppose any proposal to limit the deduction for the cost of advertising.”

Parrish, backed Walaszek’s message, that advertising is a local economic engine.

“The Republic has data locally as part of our proper performance program that demonstrates how important ad sales are to the businesses that advertise with us,” she said. When asked by the Congressman who they model advertising performance, Parrish said that they have 4,000 clients, and the majority are small and local. Then there is another group of national contracts like Kroger and Walmart. The sales generated by the local branches of these large companies support thousands of local jobs and are attracting a new generation of workers. Locally we see $3.4 million in revenue generated from this advertising.

The Congressman asked if these companies would still advertise if subject to a tax, and Parrish said they likely would not advertise as much.

Schweikert interjected that he did not want to conflate advertising’s effects on business growth with whether the deduction for advertising costs should go. The challenge is how to model tax reform and recognize the contribution of advertising.

Levy serves as regional manager of government relations for McDonald’s He noted that a very small percentage of (4 percent) of their stores is corporate-owned while 96 percent of their restaurants are owned by the operator, who must pay for the local advertising. There are 31 McDonald's franchises in Arizona alone. The corporate budget for advertising in Arizona is $10.5 million and the company nationally purchases $1.2 billion in advertising each year.

While noting this was a lot of money, David went on to say that we still are facing 68,000 pages in the Tax Code that leaves businesses with a challenge of compliance. That is why we are embarking on an aggressive effort to simplify our tax structure.

Schweikert disclosed that throughout all of the discussions about tax reform since he joined the Ways and Means Committee, they have never discussed advertising as a specific line item, implying that it was not presently on the table as a pay-for.

This changed less than two weeks after our meeting when he notified members of our group that the committee had considered and passed over an ad tax.

The Congressman then turned to me and aksed why this is so important to The Fountain Hills Times.

I responded by saying, “The legislature has already hurt the newspapers in Maricopa and Pima Counties by taking most of the legal advertising from us. That cost us $40,000. We don’t need anything else hurting our operation. I’m turning 70 years old in a couple of weeks and I want to turn over the operation to my son. I want to make sure it’s worth something when I do.”

When we were walking out to the car, Brent said. “I felt small in there.”

I said, “Since when did you ever feel small?” “(He’s 6-Foot-5 and built like an NFL linebacker.)

“I mean here was the number two guy at McDonald’s, the head of Channel 15, the head of the broadcasters association, the publisher of The Arizona Republic and so on.”

“We are just the little Fountain Hills Times, he said.

“I thought we held our own in there,” I responded.

I think this was a good lesson for my “little” boy.