The legislation that promises to save President Donald Trump from suffering a legislative shutout in his first year in office is colliding head-on with his campaign pledges.
Recall that in the closing weeks of last fall’s campaign, Trump drew rapturous applause for his promise to “drain the swamp.” And his policy prescription for draining that swamp focused almost entirely on reducing the influence of lobbyists.
Fast forward 13 months.
Congress is on the brink of passing legislation that would overhaul the tax code in myriad ways to benefit corporations, prosperous partnerships and the wealthiest Americans.
Meanwhile, a search of disclosure reports filed with the U.S. Senate reveals that more than 6,200 people have lobbied on taxes this year, and more than 4,200 on “tax reform,” specifically.
Even by Washington standards, the sheer scale of this tax lobbying offensive is staggering.
The 6,200 lobbyists working on taxes account for 57 percent of all federal lobbyists. That’s more than 11 lobbyists for every member of Congress. Put another way, it’s as if nearly the entire undergraduate enrollment at Georgetown University descended onto Capitol Hill … permanently.
- Twenty-six industries hired at least 150 lobbyists, led by pharmaceuticals (653) and insurance (600).
- Twenty corporations and trade associations hired at least 50 lobbyists apiece. The U.S. Chamber of Commerce and Business Roundtable combined to deploy more than 152.
- Five corporations (Altria Group, Anheuser-Busch, Comcast, Microsoft and Verizon) hired at least 15 separate lobbying firms to lobby on taxes.
- More than 30 lobbyists who worked on Trump’s campaign, his transition or had other close ties to Trump or Vice President Mike Pence have drawn paychecks for lobbying on taxes this year.
That is the swamp at its swampiest.
But other than the almost biblical proportions of the numbers, there’s nothing really surprising here. Most lobbying is about money, and few topics are more about money than taxes. With their enormous complexity, tax issues are like target practice for corporate America’s hired guns. And the enormous stakes of tax issues ensure that these lobbyists are richly compensated for their handiwork.
The rest of us are left to deal with the noxious byproducts that the parasitic relationship between lobbyists and taxes spews off.
As almost everybody now realizes, the bills pending in Congress cater almost entirely to the wealthy and well-connected. For example, a massive corporate tax cut that will mostly benefit the wealthy sits next to deep reductions in the estate tax and alternative minimum tax that will entirely benefit the wealthy. The absurd “carried interest” loophole that allows lavishly paid private equity fund managers to qualify for a reduced tax rate was, of course, left mostly intact.
In contrast, there is little in these proposals for the millions of people who turned much of rural America into a forest of Trump-Pence signs last November. People making less than $100,000 would see just modest changes to their tax bill, with the lowest income earners actually coming out worse off. The bills likely would cause growing deficits, portending drastic cuts in Medicare, Medicaid, nutrition assistance and other safety net programs.
If there is any consolation, if one believes their backers , the legislation would simplify the tax code. But those claims are no more believable than Trump’s promise to drain the swamp.
Most of the action surrounding the competing GOP bills has consisted of lobbying to restore, refine or redouble tax breaks that are dear to special interests. The Senate bill has a sop to auto dealers, along with gifts to the beer, cruise line and the oil and gas industries, to name just a few.
General Electric is putting on a full court press to avoid taxes on repatriated earnings and got language inserted into a report accompanying the House bill indicating that the House “intends to revise” the provision that offended the company.
Lobbyists are scurrying to increase interest deductibility, expand the giveaway to pass-through companies (whose income is passed through to the owners for tax purposes) and help investors delay paying taxes on capital gains – maybe forever – and on and on.
The devil truly is in the details. And those details are the swamp creatures’ meal tickets.