House and Senate Republicans recently passed a pair of tax bills that slash the corporate tax rate and give extra goodies to industries with some of the most active lobbyists. These include tax breaks for alcohol manufacturers, energy producers, and tech companies.
This is not a coincidence.
America's largest corporations have been lobbying Congress on tax issue for years. Over the past two decades (when groups were required to start disclosing their lobbying activity), more businesses have entered the game, and they are lobbying a lot harder than they used to.
With Republicans in control of the House and Senate, and the prospect for a deal on tax reform looking promising, lobbying reached a pinnacle this year, with 2,065 groups pushing their cause, according to reports published by the nonpartisan Center for Responsive Politics. The efforts are employing more than 6,000 lobbyists, the nonpartisan Public Citizen counted.
The four organizations that reported the most lobbying activity on tax issues so far this year are Fortune 500 companies with a huge stake in the outcome: Comcast, Microsoft, Altria Group (formerly Philip Morris), and NextEra Energy. (Disclosure: Comcast, through its NBCUniversal subsidiary, is one of several major investors in Vox.com's parent company, Vox Media.)
In all, these companies have spent millions of dollars this year alone lobbying on tax issues. Their disclosure reports show at least one common goal: lowering the corporate tax rate.
The reports also show aggressive campaigns for specific benefits. These companies aren't getting everything they've lobbied for, but many have made it into the final bills. These include deductions for advertising expenses, lowering excise taxes on alcohol, and keeping the research and development tax credit.
This is a smart strategy. Pushing for small changes that benefit one or two industries works well, says Benjamin Waterhouse, a historian at the University of North Carolina Chapel Hill who wrote the book Lobbying America: The Politics of Business from Nixon to NAFTA.
"Where lobbyists are especially effective is in the weeds, where no one can see them," Waterhouse said.
Here are the four companies lobbying most aggressively on tax issues right now (based on lobbying disclosure reports submitted to Congress between January and September 30). They are all Fortune 500 companies, and all of them have full-time lobbyists on staff, but they've also spent millions hiring Washington lobbying firms to meet with lawmakers on their behalf. Disclosure reports show that their lobbyists have met frequently with members of the congressional tax-writing committees.
The world's largest cable company, which owns NBCUniversal, is the most active lobbyist on tax issues this year. The company's own lobbyists and hired guns filed an astonishing 60 lobbying activity reports related to taxes so far this year.
Wish list: A top priority for Comcast was to preserve the advertising tax deduction for businesses, which makes sense, since advertising is a key source of revenue for cable companies. Comcast also lobbied for companies to keep writing off interest payments as a business expense and to expand expensing on capital investments. (Current law allows companies to deduct part of the cost of purchasing new equipment and other capital.)
Successes: Both tax bills include full, immediate expensing of new equipment costs for five years, and both preserve the full deduction of advertising costs. However, both bills cap the amount of interest payments businesses can deduct to 30 percent of a company’s taxable earnings.
Tax overhaul was the No. 1 issue this year for the giant computer and software developer.
Wish list: Not taxing intellectual property income from foreign subsidiaries differently from other foreign income, preserving the research and development tax credit, keeping the foreign tax credit (which allows multinational companies to deduct taxes paid to foreign governments).
Successes: Both tax bills include the research and development tax. Under the R&D tax credit, companies get money back from the government for what they spend on innovation, like paying the wages of scientists and engineers.
Altria Group (formerly Philip Morris USA)
The world's largest cigarette company, which owns the Marlboro brand, has been lobbying Congress for years to lower excise taxes on cigarettes. It hasn't worked in the past, and the company was unsuccessful this time around too. However, Altria also owns the wine brands Chateau Ste. Michelle and Columbia Crest, which get special treatment in the Senate bill.
Wish list: Lowering excise taxes on cigarettes and alcohol, lowering/removing capital gains taxes.
Successes: The Senate tax bill lowers excise taxes on beer, wine, and liquor by about 16 percent. The 3.8 percent tax on investment income (capital gains) remains the same.
Side note: Another major tax lobbyist is the beer company Anheuser-Busch, which has been pressing lawmakers heavily to lower alcohol excise taxes. My colleague German Lopez explains the problem with that here).
NextEra Energy, which owns the private utility company Florida Power & Light, is also one of the largest producers of sun and wind energy. Because of generous tax credits for renewable energy production, NextEra pays very little in federal taxes. So it's no wonder preserving these tax breaks was the company's top goal.
Wish list: All of the company's 49 tax lobbying disclosures involved efforts to keep tax incentives for producing renewable energy.
Successes: Both the Senate and House bills keep the tax breaks for wind and solar energy investments.