Not everyone is looking forward to tax reform as Congress is about to find out
For most corporations, small businesses, and individuals tax reform will be a welcome relief after more than two decades of rising taxes across the board.Â However there are a number of groups who could actually lose some of their long-standing benefits which even go back to the Great Depression era, and they are preparing to engage in a full court press on Congress to lobby legislators towards protecting their cash cows.
Having sworn themselves to secrecy, Republicans on the House Ways and Means committee are scrambling to put together a tax bill by next week. But not knowing anything about the details of the plan, as it stands right now, hasnâ€™t stopped an army of lobbyists from mobbing Capitol Hill with one overweening mission: To threaten, cajole or otherwise coax lawmakers into preserving loopholes that benefit their clients.
The stage was set with the Houseâ€™s adoption Thursday of a budget resolution designed to speed the course of tax legislation and kick off a three-week sprint toward a House bill.Â Now, lobbyists representing every corner of the economy are poised to first devour, then attack what may be hundreds of pages of legislation that Brady saysÂ heâ€™ll release Nov. 1.
Special interests from realtors to dairy farmers will be trying to save their industry-specific tax breaks, said Tim Phillips, president of Americans for Prosperity. His group, which is backed by billionaire industrialists Charles and David Koch, supports ending such breaks.
â€śItâ€™s pretty fierce,â€ťÂ Phillips said. â€śWe met with Brady on Tuesday and he was saying their offices are swamped with all the special interest groups swarming in asking to be protected.â€ť –Â Zerohedge
Of course the biggest battle over tax reform will take place in deciding whether to keep or remove the tax deduction that allows individuals the ability to deduct their state tax payments on the Federal returns.Â But outside of this general deduction, there are dozens if not hundreds of specialized deductions in the IRS code that go back even as far as the 1930’s which protect farmers, businesses, and investors that are no longer needed, but wanted by lobbyists nonetheless.
The ability to tax is power, and that is one commodity that politicians are adverse to ever relinquishing.Â And it is why the fairest tax system, that of using simple tax rates with no deductions at all, is something that Congress will never enact despite the fact it would be the best stimulus of all.
Kenneth Schortgen JrÂ isÂ a writer forÂ The Daily Economist,Â Secretsofthefed.com,Â Roguemoney.net, andÂ Viral Liberty, and hostsÂ the popularÂ youtube podcastÂ on Mondays, Wednesdays and Fridays.Â Ken can alsoÂ be heard Wednesday afternoons giving an weekly economic report on theÂ Angel Clark radio show.