An Army Of Lobbyists Is Coming To Kill Tax Reform

Having sworn themselves to secrecy, Republicans on the House Ways and Means committee are scrambling to put together a tax bill by next week. But not knowing anything about the details of the plan, as it stands right now, hasn’t stopped an army of lobbyists from mobbing Capitol Hill with one overweening mission: To threaten, cajole or otherwise coax lawmakers into preserving loopholes that benefit their clients.

Here's Bloomberg:

The stage was set with the House’s adoption Thursday of a budget resolution designed to speed the course of tax legislation and kick off a three-week sprint toward a House bill. Now, lobbyists representing every corner of the economy are poised to first devour, then attack what may be hundreds of pages of legislation that Brady says he’ll release Nov. 1.

 

Special interests from realtors to dairy farmers will be trying to save their industry-specific tax breaks, said Tim Phillips, president of Americans for Prosperity. His group, which is backed by billionaire industrialists Charles and David Koch, supports ending such breaks.

 

“It’s pretty fierce,” Phillips said. “We met with Brady on Tuesday and he was saying their offices are swamped with all the special interest groups swarming in asking to be protected.”

The immense pressure to find a source of revenue to compensate for the sweeping cuts to corporate and individual rates has already nearly derailed the tax reform process. Yesterday, House Republicans narrowly approved the Senate version of a $4 trillion federal budget over the objections of 20 blue-state Republicans who oppose the elimination of the state and local tax deduction, which they say would disproportionately raise taxes on middle-class taxpayers in blue states, which tend to have higher taxes. Yet, Ways and Means Chairman Kevin Brady has said the elimination of the SALT deduction will stay in the bill - for now, at least.

Kevin Brady

On a static basis, the nine-page outline introduced by the White House and GOP Congressional leaders last month will cost $2.4 trillion over the first decade and $3.2 trillion over the second decade, according to an analysis by the nonpartisan Tax Policy Center. The TPC also found that 80% of the benefits from tax reform would accrue to the top 1% of earners. Republicans who are writing the bill must somehow reduce the impact on the deficit to $1.5 trillion, while adhering to President Donald Trump’s promise that middle-class Americans would be the biggest beneficiaries of the tax overhaul.

Still, it remains to be seen which groups will lose their benefits. According to Bloomberg, even Republican members of Ways and Means don’t know what will be preserved and what will be eliminated.

That could make releasing the bill by the Wednesday deadline difficult.

“The problem is that Ways and Means has somewhat been kept out of the loop with details,” Representative Jim Renacci of Ohio, a member of the House tax-writing panel, said in an interview. “There are still a lot of hurdles to get it done.”

As Bloomberg points out, the elimination of the SALT deduction has become one of the most divisive issues surrounding tax reform. Trump and congressional leaders have proposed abolishing that break, which benefits high-tax states that tend to vote Democratic. But several Republican House members from such states want to preserve the break in some form.

“Can you get people to put their party loyalty above home-grown constituents’ concerns?” said Hollier, a former chief of staff and legislative director for Senator Mike Crapo, an Idaho Republican. “How they deal with that will show that people can be broken.”

And unsurprisingly, corporate lobbyists, who are used to their clients’ interests being given priority in Congress, are upset with the Republicans’ decision to keep other details of the bill under wraps.

Will Hollier, whose clients include Microsoft Corp. and Visa Inc., told Bloomberg that secrecy is a double-edged sword: The secrecy has allowed for some efficiency, but it’s also prevented GOP leaders from winning broad support.

Which could create problems for the bill as it moves forward because, as Sen. Bob Corker told Bloomberg: “I don’t think that people realize that 80 percent plus of this effort is eliminating things in the code,” referring to special interest loopholes. Meaning that, once the bill’s details are made public, Republicans will need to guide it to the president’s desk over lobbyists’ objections.  

“I mean, over the next two weeks, especially when the Senate tax-writing committee puts their stuff out, they’re going to realize that this the biggest tax code rewrite since 1986 and it’s going to affect everyone,” Corker said.

Lobbyists have already started pushing back against details in the nine-page outline that would raise taxes on corporate America. Those measures include the elimination of corporate deductions for interest payments – which could raise as much as $1 trillion over a decade – as well as a new foreign minimum tax that would affect corporations who shift profits to offshore tax havens

One of the ways to make up the revenue gap is by limiting the deductions corporations take on the interest they pay on their loans -- a major consideration for industries such as private equity and real estate. A prior House Republican proposal called for completely eliminating the corporate break, which could have raised more than $1 trillion over a decade.

 

“They’re totally undecided,” about how to restrict corporate interest deductions, said Marc Gerson, the chair of law firm Miller & Chevalier. Gerson said proposals include setting limits based on a company’s earnings before interest, tax, depreciation and amortization, or Ebitda, a key measure of profitability. Existing debt might be grandfathered in, he said.

 

Another piece of the framework is aimed at preventing U.S. companies from shifting their earnings to offshore tax havens -- by imposing a minimum foreign tax. The idea -- described briefly and obliquely in the framework language -- was called “appalling” several weeks ago by Ken Kies, a lobbyist whose clients include Microsoft and General Electric Co. The rate and formula for such a tax haven’t been specified, but the proposal carries multibillion-dollar implications for multinationals.

 

On the individual side, the treatment of state and local deductions remains in question. At least 12 Republicans from high-tax states, whose constituents stand to lose if the tax break is repealed, voted no on the House budget Thursday. The most vocal among them have demanded a compromise on the issue.

Given the number of parties involved, there are many obstacles to passing tax reform by the Republicans’ hoped-for deadline of year’s end, including the other issues on the Congressional agenda. Congress must fund the government to avoid a shutdown by Dec. 8. That could turn ugly as the White House has signaled it’ll demand funding for a border wall, and Democrats say they want a solution to protect young undocumented immigrants.

To be sure, there is one powerful political imperative that might force Republicans to swallow their objections: The fear that another legislative failure - especially one with the potential to tank financial markets - could cost Republicans one, or both, of their Congressional majorities.

House and Senate leaders hope to pass bills through their chambers by Thanksgiving, said Speaker Paul Ryan and Senate Majority Whip John Cornyn. The different bills would then have to be reconciled with another round of votes in December. Only then can Congress send the final bill to the president’s desk.
 

Comments

LawsofPhysics Fri, 10/27/2017 - 11:44 Permalink

Gotta keep that FREE money going to bankers, financiers, and their political puppets in D.C.!!!!Sounds to me like a lobbyest is yet another parasite...Oh well, back to work all you tax mules!"Full Faith and Credit"same as it ever was...

Creepy_Azz_Crackaah toady Fri, 10/27/2017 - 12:44 Permalink

Go to a flat tax where **EVERYONE** pays something for this behomoth gubmint and make all property taxes (forced rent to the gubmint) illegal.  Nobody should be thrown out of their home becasue the gubmint wants money form them.  There a HUGE advantages to this.  Fewer lawyers  Fewer accountants.  Fewer IRS.  Smaller gubmint.  More liberty.

In reply to by toady

Give Me Some Truth El Vaquero Fri, 10/27/2017 - 12:04 Permalink

Just skip the middle man. Let the lobbyists write the bill.Edit: Don't worry, they already are/have. I don't know why reporters cover all the self-important Congressional leaders. We think these guys take the time to write these hundred-page bills? There's probably only two or three of them in the House and Senate who will even read the final product. About the same number of reporters who will read them.P.S. I love the titles and labels they attach to all of this legislation. "Tax Reform" to reform the previous "tax reform," which reformed the previous tax reform. Which will be reformed again next year.  

In reply to by El Vaquero

freedogger El Vaquero Fri, 10/27/2017 - 12:30 Permalink

I've read shit about a flat transaction tax. Every time money moves from a to b tax it at a ridiculously low rate of .002 percent. Do away with tax incentives and every other existing tax. Fucking simple, could be built right into the currency via blockchain technology. I'd fucking move to the first country to do this.

In reply to by El Vaquero

Anon2017 serotonindumptruck Fri, 10/27/2017 - 14:25 Permalink

Just ask Billy Tauzin who headed the committee that wrote the Medicare Part D bill (senior drug benefit) back in 2004. He left Congress after the bill passed later that year and joined Big Pharma, the industry's lobby, in 2005 where he was well rewarded. The bill prohibited Medicare from bargaining with the drug companies over price. Tauzin was a Republican. American prescription drug pices are smong the highest in the world. Let's see if Trump can drain that swamp.

In reply to by serotonindumptruck

HRClinton LawsofPhysics Fri, 10/27/2017 - 12:23 Permalink

How about that "Army of 3 per centers", who are supposed to kill off the lobbyists and other (((cockroaches)))?Ah, yes... Busy hoisting and saluting the flag, singing the anthem, have a shooting session, kibbitzing, make proclamations, go home. Hoo-ha! The few, the knave. Being all they can be.As some here are fond of saying "Nothing changes, until you roll the MF'ing guillotines". Fig. or Lit. (p.s. What am I doing, you ask? In spite of my age (too old for rolling in the ditches), I'm organizing locally, while trying to admonish others here to get off their lazy, chickenshit butts and DO something. One way is to join the PARALLEL ECONOMY (barter, cash, PM, Crypto), just like the non-payers of taxes are doing. Perfectly legal Tax Avoidance).

In reply to by LawsofPhysics

HenryJ Fri, 10/27/2017 - 11:51 Permalink

Other people's rights and money and property do not end where your needs begin. Quit blaming others.The very purpose of the Bill of Rights was to remove certain topics from the political arena. They are not subject to the lawmaker or the majority. How quickly we lost the ability to understand phrases like, “Congress shall make no law”, “shall not be violated”, “shall not be infringed” and “reserved to the states respectively, or to the people”. Perhaps it is not a civics lesson we need but rather one on the English language.Our constitution was written in a manner to protect us from government,Before any law is passed it should be shown to be constitutional by stating the section and verse that authorizes such action. So too should the threshold be high requiring justification before any tax dollar is taken from free men and women. What we have now is a government that feels they have the authority to interfere in the liberties of free men and women simply on the basis of obtaining a majority vote in congress or the stroke of an executive pen. And with that they operate as if all of our money belongs to the government and they are simply there to decide how much they will allow us to keep each year. It’s the people who are supposed to be free to do, as they please, not the government.Who are you to tell me what I need to defend my family? Who are you to tell me how I should spend my money? Who are you to tell me how to raise and educate my children? Who are you to tell me how I should run my business? My rights do not end where your fears and needs begin.... My money was not earned to feed your unicorns. My liberty and my rights are not subject to a vote.  

HenryJ ParkAveFlasher Fri, 10/27/2017 - 14:46 Permalink

I would, 100%, and to add to that, My Definition of Every Politician in DC is also from the Bible, said & understood by a far better person than I will ever be ,  Matthew 23:2727 “Woe to you, scribes and Pharisees, hypocrites! For you are like whitewashed tombs which indeed appear beautiful outwardly, but inside are full of dead men’s bones and all uncleanness.  The Same Man said Render unto Ceasar, that which is his, and Render Unto God that which is his

In reply to by ParkAveFlasher

nevertheless Fri, 10/27/2017 - 11:52 Permalink

So, your saying lobbyists were not part of constructing the bill in the first place, who exactly do you think filled Trump's Cabinet, "American nationalists", lol? 

Anteater nevertheless Fri, 10/27/2017 - 12:21 Permalink

You can see how it begins. Controlled dissent in the Big Media.'The Lobbyists Against The Populist', the Golden Diaper Head,who just wants 'Tax Reforms', like the Golden Reformation ofthe Dark Ages! 'Tax Reform' to 'Secure the Blessings of Libertyto Ourselves and Our Posterity (Asses of the Investment Caste)."We are Only Doing What is Right, and It is All Together Fittingand Proper that We Should Do This!" (For a $Trillion Pentagon)Trump wil exhort, in 140 letters or less."We are Making MAGA!"He won't talk about eliminating AMT, CG and ET, and creating theFirst New Royal dynasties since the Bolsheviks slaughtered theCzar, then used those Crown Jewels to fund the Fed in America.He won't talk of the Slaughter to come, as a 1% Pyramid AssetCaste is unleashed and unfettered and freed of all taxation,their all-devouring demand for more assets, the inferno of newinterest-only demands over their $21T Bailout Debt sucking allHealth and Human Services, and eventually SS and MC trustfunds, from our refugee children and grandchildren, the burdenof which will fall on themselves, in tithes and fees to supportthe burgeoning tent cities and crowded emergency rooms ofThe New American Century. "Damn Those Lobbyists!" Trumpwill Twiddle, "Free  US from Your AMT, Your CG, Your ET, We'reYearning to be Free! MAGA, MAGA and May God Bless America!!"Then the Plebs will stand and clap until their fingernails bleed,cheering for their Great White Hope, until 2017 tax tables arrive."Look at this honey, it says right here we owe more taxes in 2018!""Now, dear, I'm sure you read the tables wrong. What about SALT?"You're gonna need a lot of salt and bandages once TR passes.

In reply to by nevertheless

youngman Fri, 10/27/2017 - 11:52 Permalink

You can bet there are going to be a bunch of free lunches and paper bags being spread around....to many loopholes to lose...and everyone has a lobbiest..this is the disgusting way Washington works

El Vaquero youngman Fri, 10/27/2017 - 11:58 Permalink

Yup.  I met with a prospective congressional candidate a couple of days ago.  Decent guy, but I don't agree with his politics across the board (not a surprise,) and he would get eaten alive in DC.  But I think I implied that when I said "decent guy."  You won't get anything done in DC unless you are willing to get comfortable with a certain level of corruption.  Anybody who wishes to run to "change the system from the inside" needs to understand this.  You either need to pick what kind of corruption you are comfortable with, or pick another way of reforming the system. 

In reply to by youngman

European American Fri, 10/27/2017 - 11:57 Permalink

Army of Lobbyists would have to have a General. The largest Lobbyist Group in the history of Lobbyist in DC? Follow the money and the motive for commanding world domination...THE ZIONIST JEWS.THe world is waking up to this tenacious cancer.

aardvarkk lester1 Fri, 10/27/2017 - 12:11 Permalink

Corporate tax rate should be zero.  Watch prices drop in proportion if they want to stay in business.  any taxes are passed through to the consumer anyway, may as well just pay them directly and cut out the middleman.  Corporate taxes are simply a way to kill jobs and make us less competitive internationally, nothing more or less.  The extent to which a politician pushes for higher corporate taxes is the exact extent to which they hate you making a decent living without their "help".

In reply to by lester1

Winston Churchill lester1 Fri, 10/27/2017 - 12:25 Permalink

Be carefull what you wish for, a BAT is the thin edge of the wedge for a national VAT.Once that gets passed a BAT goes out the window, a deductable of your VAT return.The whole level playing field argument is BS if you have knowledge about howVAT works.Its a cash flow issue, not a cost.Nobody wants to know the truth from someone who has livedunder a VAT system.

In reply to by lester1

bayou_plumber Fri, 10/27/2017 - 11:56 Permalink

Caesar said it, 'kill all the lawyers first' then we can start over with something everyone can understand.  K street is the root cause for 90% of the corruption inside the beltway.  without the money slush funds provided by all special interests maybe congress would have to live according to their means.   The one workable solution to this is the article 5 convention of states and writing ammendments by states not federal congress that impose term limits, balanced budget, and reform of the judicial system to countermand laws by judicial edict.  Judicial system is way broke and needs reform in the worst way.

shovelhead Fri, 10/27/2017 - 11:59 Permalink

Damn those evil Koch Bros.Funding Lobbyists to kill corporate tax breaks and subsidies.That's Un-American. This will destroy American investments in great innovative companies like Solyndra.

DaiRR derryb Fri, 10/27/2017 - 12:14 Permalink

VAT like the European countries, make it a little higher at 25 percent to pay for all our military expenditures, no income tax and we're now keeping our heads above the ocean of national debt.  Works for me having made my big purchases in life, but sucks for the kids early in their careers and family raising.

In reply to by derryb

aardvarkk Fri, 10/27/2017 - 12:05 Permalink

Regarding that state/local deduction, I'm very surprised that it even exists.  I have been repeatedly assured by our blue state betters that we backward red-staters are complete leeches who don't pay our fair share, and yet they are the ones who pay much less with that law in place.  I don't understand.  Guess I'm just a stupid conservative.

DaiRR Fri, 10/27/2017 - 12:09 Permalink

It is exactlly BECAUSE OF LOBBYISTS that the tax code is 77,000 pages long and a burden around the neck of every middle class American.