[Surely the lawyers and economists can figure out how to euthanize the oligarchy? It’s just a bunch of algorithms they’ve yet to find; the history of mathematical economics tells us so!]
http://www.nytimes.com/2014/04/02/business/tax-lobby-works-to-defeat-overhaul-it-once-cheered.html Corporate Lobbyists Assail Tax Overhaul They Once Cheered By ERIC LIPTON and JONATHAN WEISMANAPRIL 1, 2014 WASHINGTON — Just two days after he proposed a sweeping overhaul of the nation’s tax code, Representative Dave Camp, Republican of Michigan, traveled to Park City, Utah, for a glittering fund-raiser attended by lobbyists from some of the nation’s largest corporations, all with enormous stakes in the tax battle to come. The event was intended to honor Mr. Camp, the chairman of the House Ways and Means Committee, whose 979-page tax plan would cut the overall corporate tax rate by creating a new bank tax and a surtax on the very wealthy, among many other changes. But this gathering ended up serving a decidedly different purpose: the unofficial kickoff of a push to make sure that Mr. Camp’s tax plan dies, a campaign that is highly likely to succeed, particularly now that Mr. Camp himself essentially conceded defeat, announcing this week he will not seek re-election this year. The twist reflects how lobbying in Washington — and the millions of dollars in fees that lobbyists collect — are often about stopping action and preserving the status quo. Whenever Congress considers major changes to the tax code, lobbyists buy insurance on both sides of the fight. It also reflects a pivot by lobbyists who had spent months cheering Mr. Camp’s three-year effort to draft this giant package, given that its stated purpose was to lower corporate tax rates and simplify the tax code, and who are now working to make sure that the package never becomes law. “There is no doubt that what they have done is put a big target out there on the backs of some industries,” said Jeffrey A. Forbes, a former staff director at the Senate Finance Committee turned tax lobbyist, who was not at the Park City fund-raising event but represents clients who were. The undisputed winners of the legislative battle so far are the lobbying shops themselves. Senior congressional tax staff members have already named Mr. Camp’s push the “Build a Vacation Home for a Tax Lobbyist Act.” Lobbyists say they have to be zealous because the tax code hits almost every corporate interest. “If you are not at the table, you are on the menu,” said Heather Podesta, a lobbyist whose firm, Heather Podesta & Partners, has at least 10 tax-related corporate clients. Lawmakers on the tax writing committees — like Ways and Means — can benefit, too, as they become a magnet for hundreds of thousands of dollars in campaign contributions, even though Mr. Camp’s early legislative drafts of the tax proposal included provisions that would have hurt some of his top donors. Donors to Mr. Camp’s political action committee this election cycle — and some of the guests at the Park City event — include PACs run by MetLife, Koch Industries, Bank of America, the Altria Group, Pfizer, Home Depot, PricewaterhouseCoopers and AT&T, among dozens of others. It is money Mr. Camp can pass on to other Republican candidates, now that he has announced he is retiring from Congress after 12 terms in the House. “Obviously this is an election year,” Mr. Camp said, last month before his retirement announcement. “It’s important that you have the resources to be able to communicate with voters,” he added, acknowledging that some of the Park City guests had cornered him on the tax plan. Mr. Camp’s proposal, released on Feb. 26, represents the most substantial effort to remake the tax code since 1986. Even though its chances of passing are remote, as a discussion draft it is still open to lobbyist-demanded changes. That is especially true because one tax issue will very much be in play, for the remaining months Mr. Camp has in office. Fifty-five temporary business tax measures expired at the end of last year, and both Mr. Camp and Senator Ron Wyden, Democrat of Oregon, the new chairman of the Senate Finance Committee, have said they hope to cull those tax provisions as a dry run for a broader tax-code overhaul. Mr. Camp would repeal or make changes that effectively repeal 37 of the 55. Others, such as the research and development tax credit, would be made permanent. “For the most part, it’s either permanent or gone” in the Camp plan, said a senior Ways and Means aide. That has already scrambled the jets on K Street, home of the lobbying industry. Conceptually, rewriting the tax code has bipartisan support in Congress; leaders in both parties as well as the White House want to lower corporate tax rates to make the United States more competitive. But as Mr. Camp has learned, the deals are a source of great division. His plan, for example, would impose a tax costing $86 billion over 10 years on 10 large lending institutions — JPMorgan Chase,Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, GE Capital, the American International Group, and Prudential. Private equity and hedge fund managers would face a big hit because income gleaned from their clients’ investment gains would be taxed at income tax rates, not the much lower capital gains rate. Insurance companies also would take a hit, as would advertisers, since company advertising would no longer be considered a tax-deductible business expense. The small-business lobby was incensed over a 35 percent tax rate on most income over $400,000 ($450,000 per couple). Since most small businesses pay taxes under the individual income tax system, the industry trade association cried foul because the corporate tax rate tops out at 25 percent under the Camp plan. These changes were necessary — in large part — because Mr. Camp had committed at the outset of his effort to lowering the overall corporate tax rate and simplifying the tax code, without reducing overall federal revenue. There were some obvious winners in the proposal, such as the medical device industry: A tax on the sale of medical devices included as part of the Obama administration’s health care program would be repealed, a $100 billion boon over 10 years. The Park City fund-raiser for Mr. Camp was held at the vacation home of Jeffrey J. Kimbell, a lobbyist who helped set up the Medical Device Manufacturers Association, and who still represents the industry. Another windfall came for the small group of lobbying firms that specialize in tax work. Revenue at one firm, Capitol Counsel, jumped to more than $14 million last year, from $8 million at the start of the Obama administration. At Capitol Tax Partners, another boutique lobbying shop, revenue jumped 17 percent just in the last year, to a record $12 million in 2013. As Mr. Camp deliberated, a number of corporate-backed groups also emerged to try to influence the process. A firm run by Anita Dunn, a former communications director for President Obama, is advising the Alliance for Competitive Taxation. Ed Gillespie, now a Republican candidate for the Senate in Virginia, advised the RATE Coalition (Reforming America’s Taxes Equitably), along with the DCI Group, a Republican-leaning lobby shop. Jeffrey H. Birnbaum, president of BGR Public Relations and a former journalist who wrote, with Alan S. Murray, “Showdown at Gucci Gulch,” the seminal book on the Tax Reform Act of 1986, has helped assemble the Coalition for Fair Effective Tax Rates, uniting the small-business lobby — the National Federation of Independent Business — with the retail lobby, the Retail Industry Leaders Association. Most of those groups have kept their total spending last year a secret. But the Alliance for Competitive Taxation alone paid PricewaterhouseCoopers $1.7 million last year, one of the single biggest lobbying contracts in 2013. Lobbyists and trade association executives involved in these efforts say there is nothing untoward about this surge in tax-related special pleading, even when almost everyone involved agrees that major changes to the tax code are still at least a year off. “The history of tax reform is that it takes a long time to gestate,” Mr. Birnbaum said. “We understand there’s not likely to be legislation this year, but that gives us the opportunity to educate lawmakers.” What the corporations and lobbyists perhaps most fear now is that some of the individual revenue-raisers in Mr. Camp’s plan could actually be adopted independent of a larger bill. “If you are in the Camp draft in a harmful way and you are not making your provision nuclear, in terms of making it clear that it will hurt certain lawmakers politically if it survives, then you will end up in the next draft,” said one lobbyist, who asked not to be named so as not to publicly acknowledge the tactics. Already, more than 50 House Republicans have signed a letter to Mr. Camp criticizing his tax plan — a letter generated in part by industry lobbyists who pressed the lawmakers to take such a stand. “The big fear of any tax lobbyist is that you can only talk about tax reform for so long,” one such lobbyist said. “At some point the companies will say, ‘If this isn’t happening, we don’t want to throw more money at it.’ ” An earlier version of this article erroneously included one large financial institution among those upon which Mr. Camp’s plan would impose a tax of $86 billion over 10 years. MetLife has a special exemption from the tax; it is not among the institutions that would pay it. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
