NEW REPORT REVEALS MASSIVE SCOPE OF LOBBYING ON TAX EXTENDERS AND THE “GE LOOPHOLE”
WASHINGTON – Americans for Tax Fairness and Public Campaign today released a joint report about an aggressive corporate lobbying campaign on "tax extenders" -- a package of 55 tax breaks that the Senate Finance Committee is slated to mark up on April 2. The package could cost $46 billion in 2014 and up to $700 billion over 10 years.
The report reveals that 1,359 lobbyists representing 373 corporate entities pressed Congress on tax extender legislation between January 2011 and September 2013. Tax extender lobbying during the period was very intense – lobbyists names appeared 12,378 times in quarterly lobbying reports. Each appearance may represent a few or dozens of contacts with members of Congress or their staffs.
Lobbying on a tax extender known as the Active Financing Exception (AFE) was dominated by Wall Street banks, insurers and companies with large financing units like General Electric, Citigroup, Goldman Sachs, Morgan Stanley, Prudential and American Express. This loophole enables corporations to avoid paying federal income taxes on financial income that can be claimed to have been generated offshore.
Using the Active Financing Exception and other methods of tax avoidance, GE has been able to keep its federal income tax rate phenomenally low. GE claimed $3.1 billion in federal tax refunds on $27.5 billion in profits in the five years between 2008 and 2012, according to a report by Citizens for Tax Justice.
The report released today reveals that General Electric has the biggest lobbying operation on both the AFE and on tax extenders in general. It pays more lobbyists than any other corporation or trade association, and its lobbyists appear on more lobbying reports. GE employs all 10 of the top 10 lobbyists on the AFE. Eighty-three percent of GE's lobbyists on the issue were former Hill staffers, members of Congress, or employees of the executive branch. And for every $1 GE spends on lobbying it gets at least $24 in tax refunds.
"By taking a close look at intense, strategic corporate lobbying to maintain sweetheart deals, this report perfectly illustrates how our political system rewards the wealthy and well-connected at the expense of everyday people," said Tam Doan, research director at Public Campaign.
"An army of corporate lobbyists has converged on Congress to convince lawmakers to pass the 'GE Loophole' and the entire tax extender package," said Frank Clemente, Executive Director of Americans for Tax Fairness. "The general of this army is General Electric, which earned $27.5 billion in recent years but claimed $3.1 billion in federal income tax refunds. When GE avoids paying its fair share, the rest of us pay more. Congress shouldn't cave into the legions of lobbyists. It should reject the GE Loophole."
Full text of "Corporate Lobbying on Tax Extenders and the 'GE Loophole'"
Americans for Tax Fairness is a diverse coalition of 400 national and state organizations that collectively represent tens of millions of members. The organization was formed on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. ATF is playing a central role in Washington and in the states on federal tax-reform issues.
Public Campaign is a national nonpartisan organization that fights to raise the voices of everyday people in our democracy through changing our campaign finance laws and through holding elected officials accountable.