Steve Bannon recently met with mega Republican political contributor Bernie Marcus and heard him complain “for hours about the lack of return on his investment,” reported Politico.com,
BILL CRAWFORD — Big contributors aggressively pursuing (buying?) tax cuts
A decade before becoming Secretary of Education, Betsy DeVos, whose family has helped bankroll Republican issues and candidates, wrote in Roll Call, “I have decided to stop taking offense at the suggestion that we are buying influence. Now I simply concede the point. They are right. We do expect something in return.”
Koch brothers ally Doug Deason told OpenSecrets.org in September that “he and other big-donor Texans are fed up and have stopped hosting high-dollar fundraisers until Republicans make good on the money.”
The major make good return these and other billionaire contributors want most of all appears to be tax cuts.
“The powerful political network overseen by conservative billionaire Charles Koch is launching a multimillion-dollar campaign to drive Trump’s tax plan through Congress,” USA Today reported earlier this year. In early October the news organization said the Koch network, “already has spent more than $10 million this year on its campaign to pass the tax plan” and is “sending activists door-to-door in key states and having donors dial Republicans on the Capitol Hill, pressuring them to speed a tax plan through Congress this year.”
So, are these and many other billionaires spending big because tax cuts will be good for America, or because tax cuts will be especially good for them?
Buying influence is common to American politics. Buying direct government benefits is something most conservatives have strenuously opposed.
The biggest benefit in the pending Republican tax plan, $1.5 trillion, comes from the proposed corporate tax rate reduction from 35% to 20%. (Trump wants 15%.)
There is near universal agreement that the current corporate tax rate is too high, anti-competitive, and should be reduced. However, the rate at which U.S. taxes become internationally competitive is different from the rate at which major corporations receive an excessive windfall.
Experts suggest a corporate tax rate of 24% to 25% would make U.S. rates competitive. The average rate for the 35-nation Organization for Economic Co-operation and Development (OECD), of which the U.S. is a member, is 24.7%. China’s rate is 25%.
So, pushing for 20% or lower rates does open the door to arguments the big contributors are trying to buy a huge benefit.
Additional proposals to eliminate the inheritance tax, eliminate the alternative minimum tax, provide a 25% pass-through rate for partnerships and sole proprietorships, and lower the top personal income tax rate – all beneficial to the wealthy – only make the arguments stronger.
Meanwhile, average taxpayers will be asked to help pay the tab. Republican tax writers are looking at changes to 401(k) plans, eliminating mortgage interest and state and local tax deductions, eliminating personal exemptions and raising the low-end tax rate from 10% to 12% (somewhat offset by doubling the standard deduction). There is also a provision that the national debt may be increased up to $1.5 trillion, an indirect but real cost to average taxpayers.
“Wall Street is expecting to see a tax reform package by the end of the year,” reported CNBC.
Big contributors are demanding it.