Donald Trump’s victory in 2016 should have taught Republicans a thing or two about doing business as usual.
Top congressional tax writer Kevin Brady may have gotten the message. Rep. Brady, R-Texas, who is chairman of the Ways and Means Committee, has proposed an end-of-year tax bill that abandons one of the swamp’s most revered holiday traditions, the corporate tax extenders.
The “extenders” are corrupt in two ways.
First, they are mostly special-interest tax credits that serve to enrich the well-connected while complicating the tax code.
The current extenders package, included in the Senate bill, would keep alive a tax credit for electric vehicles. This is a subsidy for billionaire Elon Musk and the wealthy people who can afford his Teslas. Homebuilders benefit from the extenders’ tax credit for energy-efficient new homes. Biodiesel, wind power, and other green power technologies would get special tax breaks as well.
NASCAR stadiums would get to keep their special tax break — the bill pretends that such complexes wear out in seven years, which isn’t true. Also receiving special expensing rules in the package are TV and film productions.
This is all corporate welfare in which the insiders get special breaks the outsiders can’t. Some of these carve-outs were arguably justifiable at their creation, as ways to incubate new technologies. But almost all of them have outlived that excuse. Nevertheless, Republicans and Democrats alike have renewed these tax breaks every year or two, usually in the lame duck session, when many of the members voting for the special deals are a couple weeks away from taking lobbying jobs working for the beneficiaries.
The lobbyists are the key to the second corrupt element of the extenders: the regular renewal.
Special tax credits generally make no sense, but they make even less sense when they expire every two years, only to be renewed every two years, sometimes retroactively. You don’t spur investment with uncertainty, but you certainly don’t spur investment with retroactive tax credits — that’s just giving away money.
So in whose interest is the expire-renew cycle? The lobbyists who make their bread and butter fighting for these provisions every two years, and the congressmen who get courted and funded by said lobbyists.
By proposing a year-end tax bill without these extenders, Brady is harming his career prospects and those of his staffers. Where’s the future K Street job if these special-interest carve-outs die? Or if, alternatively, they become permanent?
Instead of extending these special-interest breaks, Brady has proposed a year-end tax bill that abolishes targeted tax hikes, many of which are from Obamacare.
Because Brady’s bill would simplify the code and pull the rug out from under the lobbyists and the future lobbyists (that is, senators, congressmen, and their staff), it has the odds stacked against it — but so does any effort to drain the swamp.
