Lobbying firms initially paid to champion changes to the tax code are now fattening their bottom lines ensuring the revisions never become law, according to The New York Times.
In the lead-up to Michigan Sen. Dave Camp’s release of the proposed amended tax code – a 979-page behemoth that took three years to draft – K Street lobbying firms appeared to be in Camp’s camp, the Times reported.
But after the late February release of the Camp proposal – the largest revision of U.S. tax code since 1986 – big business, specifically oil, financial services, private equity, and real estate industries, have balked at its contents, Bloomberg
Among the myriad items distasteful to corporations is the plan to repeal or make permanent changes to 37 of 55 business tax provisions, such as the research and development tax credit, according to the Times.
Lobbyists are hard at work scrutinizing the proposed tax code that affects "almost every corporate interest," according to the Times.
"If you are not at the table, you are on the menu," lobbyist Heather Podesta told the Times. Podesta’s firm has at least 10 tax-related corporate clients.
According to the Times, the largest banks and financial institutions – JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, GE Capital, the American International Group, and Prudential – would be hit with a tax costing them $86 billion over 10 years, while private equity and hedge fund managers are upset over a change that would tax clients’ investment gains at income tax rates instead of the lower capital gains rate.
"A targeted tax on financial institutions, regardless of form or motivation, is misguided and utterly at odds with the fundamental objective of comprehensive tax reform," said a letter from 11 banking groups, including associations that represent Morgan Stanley and Goldman Sachs, according to Bloomberg.
Insurance companies and ad agencies would no longer be able to include company advertising as a tax-deductible expense. And the small business lobby and industry trade associations are in an uproar over the proposal to tax income over $400,000, or $450,000 for a couple, at a 35 percent tax rate while the corporate tax rate would max out at 25 percent. Most small business owners pay taxes as individuals.
The medical device industry, along with retailers and franchise businesses, have been supportive of the plan.
The lobbying industry, however, is the big winner, according to the Times, noting congressional staff members have coined the Camp proposal the "Build a Vacation Home for Tax Lobbyist Act."
Revenue at the firm Capitol Counsel has nearly doubled, from $8 million at the start of the Obama administration, to more than $14 million last year, according to the Times, while Capitol Tax Partners saw a record jump in its revenue, totaling $12 million in 2013.
Bloomberg reports that one of the single largest lobbying contracts last year went to the Alliance for Competitive Taxation, which paid PricewaterhouseCoopers $1.7 million.
© 2016 Newsmax. All rights reserved.