CENTER FOR RESPONSIVE
POLITICS
MONEY IN POLITICS ALERT
Vol. 6, #9 March 7, 2001
tel: 202-857-0044, fax: 202-857-7809
email: [EMAIL PROTECTED],
web: www.opensecrets.org
Tax Cuts:
A Look at What Some Special Interests
Want
By Holly Bailey
When the U.S. House tomorrow takes
up President Bush's ambitious
$1.6 trillion tax cut, corporations
and trade groups once looking
to attach a long list of tax breaks
to the proposal supposedly
will go home empty-handed.
It's not that the plan doesn't include
some plums for corporate
America. Bush is asking for a permanent
extension of the so-called
Research and Experimentation tax credit,
a corporate subsidy
valued by almost every industry in
the nation that will cost
taxpayers about $50 billion over the
next decade, according to
the Office of Management and Budget.
To hear business groups tell it, they
are, in fact, thrilled
about the wide reach of tax plan itself.
>From its cut in tax
rates for individuals to a proposed
phase out of the estate tax,
some of Washington's biggest trade
associations contend they
couldn't be happier with Bush's proposal.
To prove so, they've
organized nearly a half-dozen coalitions
to lobby Congress and
steer public opinion in favor of the
bill.
But while the White House reportedly
has adopted a hard stance
against including corporate subsidies
in the tax plan, there's
no guarantee that Congress will toe
the party line. After all,
the people who paid the estimated
$3 billion tab for last year's
record-breaking elections are looking
for a return on that investment,
and the tax bill provides an irresistible
vehicle for achieving
that goal.
Here's a guide to what some of those
interests want, including
a breakdown of their soft money, PAC
and individual contributions
to federal parties and candidates
during 1999-2000:
Computer/Internet Industry
Contributions Total: $38.6 million,
52 percent to Democrats
In addition to pressing for an extension
of the Research and
Experimentation tax credits, the computer
industry thinks software
should be considered a depreciable
asset, while Microsoft Corp
($4.5 million; 53 percent to Repubs)
simply wants the cost of
software to be written off as a business
expense. Internet companies,
meanwhile, are pressing for tax credits
to expand high-speed
Internet access networks around the
country.
Automotive Industry
Contributions Total: $17.6 million,
79 percent to Republicans
The auto industry is not only pressing
for an overall tax cut
in hopes of boosting sagging auto
salesbut also for credits that
would encourage consumers to purchase
vehicles built using new
technology, such as the gasoline-electric
hybrid cars. Ford Motor
Co ($772,125; 71 percent to Repubs)
and General Motors ($688,803;
73 percent to Repubs) also are hoping
to change the way the government
taxes multinational companies.
Oil & Gas
Contributions: $32.4 million, 78 percent
to Republicans
Electric Utilities
Contributions: $18.4 million, 68 percent
to Republicans
Mining
Contributions: $6.5 million, 86 percent
to Republicans
With two former oil industry executives
in the White House, there's
perhaps no other industry better positioned
to gain financial
favor from the government than energy
companies. But you won't
find any specific tax incentives for
the industry in the Bush
plan. Instead, it appears Congress
will be the one stepping to
the plate, which it did last week.
One day before Bush delivered
his budget to Congress, Senate Energy
Committee Chairman Frank
Murkowski (R-Alaska) unveiled the
National Energy Security Act
of 2001, a bill that doles out billions
of dollars in tax subsidies
for energy companies, according to
the watchdog group Taxpayers
for Common Sense. Among the items:
a much-sought-after reduction
in the royalties that oil companies
pay the government for drilling
on public land and incentives for
nuclear power plants to produce
more energy.
Restaurants & Bars
Contributions: $8 million, 71 percent
to Republicans
Almost six years after Congress repealed
a tax deduction for
the "three-martini" business lunch,
the restaurant industry is
pushing to reinstate that deduction.
The write-off currently
is 50 percent of the cost of a business
meal, and the industry,
led by the National Restaurant Association
($836,534; 86 percent
to the GOP), wants the deduction increased
to 80 percent.
Finance/Insurance/Real Estate
Contributions: $293 million, 59 percent
to Republicans
The financial sector is looking to
increase the amount people
can invest in private retirement accounts
or 401K plans. They
are also seeking a reduction in the
capital gains tax, which
is levied against the sale of stocks,
bonds, and real estate.
In addition, banks and securities
want a benefit previously approved
by the House in 1999 (but vetoed by
President Clinton) that would
defer taxes on income they earn abroad
until the money is returned
to the US -- a move that could cost
taxpayers in upwards of $5
billion a year. Insurance companies
also are looking to write
off losses by their affiliates against
profits -- a move that's
expected to cost at least $950 million
in lost taxes over the
next decade, according to Congress'
Joint Committee on Taxation.
Anheuser-Busch ($1.6 million, 51 percent
to the GOP) is pressing
Congress to roll back the federal
excise tax on beer. Approved
in 1991, the tax adds up to roughly
$18 a barrel, according to
the company. Additionally, the Wine
& Spirits Wholesalers of
America ($440,384; 73 percent to Republicans)
is lobbying to
change the way imported alcohol is
taxed in America.
Misc Business
Contributions: $163 million, 61 percent
to Republicans
The National Federation of Independent
Business ($1.1 million;
96 percent to Republicans), the US
Chamber of Commerce ($506,444;
94 percent to Republicans) and the
National Association of Manufacturers
($45,157; 70 percent to Republicans)
are looking to repeal the
corporate alternative minimum tax,
which requires corporations
receiving special deductions to pay
a minimum amount of tax on
their income. In addition, trade associations
are shopping around
a wish list of tax breaks for their
individual members, ranging
from incentives for appliance makers
that create energy efficient
products to increased write-offs for
companies' capital investments.
Click here to see the web version of
this report, including links
to top contributors and recipients
of campaign contributions
from the various industries:
