Lobbying on tax issues exploded during the first quarter of this year, as Congress prepared to extend the 2017 tax cuts through a costly filibuster-proof reconciliation package later this year.
There were more than 300 new lobbying registrations — disclosures firms file when they acquire new clients — citing tax policy issues, up more than 200 percent compared to the first quarter last year and more than 260 percent compared to the previous quarter. The first-quarter filing deadline was Monday.
While some new clients surely see opportunities in the coming reconciliation package, many are playing defense as tax writers scour the tax code for revenue raisers to offset a package which could cost somewhere in the $5 trillion ballpark over a decade.
Sectors that would be affected by oft-discussed offsets, including higher education, professional sports leagues, investment management firms and car companies, were among those hiring firms to lobby on tax issues last month.
Perennial heavy hitters, including the Chamber of Commerce, National Association of Realtors, the Business Roundtable and AARP, formerly known as the American Association of Retired Persons, also disclosed lobbying on tax issues last quarter in filings. Some hired new lobbying firms as the tax fight heats up.
Pay-for paranoia
The price tag of extending the 2017 tax cuts, along with enacting expensive new tax cuts President Donald Trump floated on the campaign trail, and pressure from fiscal hawks have tax writers searching for areas within the tax code to offset some of their costs.
Possible offsets K Street is monitoring include rolling back clean energy credits expanded by the 2022 budget law, expanding the endowment tax on universities, and ending the special tax treatment of so-called carried interest income available to investment fund managers, as well as tax breaks for sports team owners and tax exemptions for credit unions.
Those sectors mobilized during the first quarter. At least 13 colleges and universities hired outside lobbying firms last quarter, including seven for the first time.
The 2017 tax law imposed a 1.4 percent excise tax on university endowments for schools with net assets exceeding $500,000 per enrolled student. But Republicans have explored options to increase the rate and impose the tax on more schools, in some cases targeting those with high international student populations.
Schools hiring lobbying firms to focus on tax issues during the first three months of this year included Duke University in North Carolina, the Massachusetts Institute of Technology, Vanderbilt University in Tennessee, Washington University in St. Louis and others.
Credit unions are also gearing up for a fight about their tax-exempt status. The League of Credit Unions and Affiliates hired Ballard Partners to lobby on their special status. The firm started by Brian Ballard, a top fundraiser for the Trump campaign, has close ties to the administration.
Republicans are also eying repealing all or parts of the 2022 budget law’s clean energy tax credits. Some clean energy tax credits have defenders among more moderate and farm-state Republicans. But the law’s electric vehicle credits are likely to be on the chopping block.
Some companies in the auto industry expanded their lobbying footprint in the first quarter, citing tax issues and in some cases those EV tax credits specifically, including Ford Motor Co., Volkswagen Group of America and its subsidiary Scout Motors Inc., and Kia Corp.
The White House’s endorsement of ending tax breaks for sports team owners and the special tax treatment of carried interest income may have spooked some in those sectors. AllianceBernstein, an asset management firm based in Nashville, Tenn., hired Ridgeline Advocacy Group to monitor developments on carried interest treatment.
Ridgeline’s Kyle Cormney, who is working on AllianceBernstein’s behalf, is a former senior policy adviser to the House Budget Committee under then-Chairman Tom Price, R-Ga., who went on to become Trump’s first Health and Human Services secretary in 2017.
The National Football League hired four lobbying firms during the first quarter, citing tax interests, including Ballard Partners. Major League Baseball hired PhronesisDC to lobby on tax issues, as did the NFL. Brendan Dunn, an aide to former Senate Finance Chairman Orrin G. Hatch, R-Utah, is working both accounts.
Old faithfuls
Many of the top spenders on K Street disclosed lobbying on tax issues last quarter, including the Chamber of Commerce, National Association of Realtors, General Motors Co., Meta Platforms, the American Hospital Association, Business Roundtable, AARP, Amazon.com and the American Chemistry Council.
Several pushed for the extension of the 2017 tax breaks, including the 20 percent deduction for pass-through entities, as well as the reinstatement of full, upfront deductions of research and development investments, and tax relief for companies operating in Taiwan.
Some brought on new lobbying firms to focus specifically on tax issues. Amazon expanded its lobbying reach, bringing on PhronesisDC in January.
The Business Roundtable hired Ballard Partners to work on tax issues. The industry group supports extending the 2017 tax breaks and bringing back a trio of business tax breaks, including R&D deductions, and more generous deductions for interest payments and purchases of equipment and machinery.
AARP hired H&M Strategies and the GROUP DC to work on tax issues, including tax relief for seniors and incentives for caregivers. Trump promised to exempt Social Security benefits from taxes on the campaign trail, though Republicans are eying other ways to deliver tax breaks to seniors because of complications related to reconciliation rules.
The firm’s lobbying disclosure also cites work on health insurance premium tax credits, Medicare, broadband and rural health care access, which are all also potential reconciliation bill policy items.
H&M Strategies was co-founded by Ralph Hellmann, a longtime GOP lobbyist who served in House Republican leadership in the 1990s, and Nicole Mortier, a former House Republican Policy Committee policy analyst. Mortier also was a top aide to ex-Rep. Cliff Stearns, R-Fla., who was a senior member on Energy and Commerce, which has jurisidiction over Medicaid and parts of Medicare.
The team at theGROUP DC includes Pamela Thiessen, a former deputy chief of staff to ex-Sen. Rob Portman, R-Ohio, a member of the Finance Committee, which has jurisdiction over taxes, Medicare and Medicaid.
David Cleary, a former GOP staff director on the Senate Health, Education, Labor and Pensions Committee, is also listed as a lobbyist on the firm’s AARP registration, which mentions Medicare, Medicaid, and other “healthcare issues related to seniors including family caregivers.”
The post First-quarter tax lobbying bonanza as reconciliation beckons appeared first on Roll Call.
