The Trump White House has its own warring factions of senior advisers jockeying for power, yet that may pale in comparison to the camps gearing up to fight over tax reform, or already doing so.
These groups of industries, lawmakers and other interests know all about protecting their turf. And in this case, many of them want to guard against the elimination of lucrative tax breaks as the White House contemplates the outlines of a tax reform package.
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“We’re talking about a high-stakes game here that affects every business in the country and virtually every individual,” said Michael Graetz, the former deputy assistant secretary for tax policy at the Treasury Department who now teaches at the Columbia Law School. “There are billions of dollars at stake.”
The huge number of players in tax reform will complicate any effort to overhaul the tax code. Cut just one break and lawmakers risk the anger of well-funded interest groups or coalitions, which inevitably try to position their tax goodie as the one singlehandedly responsible for boosting the economy or helping the middle class.
That’s why taking on the tax code in a meaningful way hasn’t happened since President Ronald Reagan’s landmark overhaul of 1986. The interest groups are just too deeply entrenched now.
Each group also wants to avoid becoming a target for raising revenue, as lawmakers think through ways to offset deep tax cuts. Or as Washington tax lobbyists often love to joke: If you’re not at the table for the discussions, you’re on the menu.
“The problem with the tax code today is that it creates winners and losers. The objective of tax reform is to level that playing field,” said Alex Brill, a former policy director and chief economist of the House Ways and Means Committee. “If it’s done properly, those who are winners today won’t be winners tomorrow. That’s why these guys are so interested in protecting themselves.”
So as tax reform heats up, here’s a guide to 13 key camps to watch in tax reform — with many more likely to emerge if a package becomes real.
Anti-border adjustment tax crew (a.k.a. Ryan’s nemeses)
Far and away the most noise being made, so far, involves Speaker Paul Ryan and Chairman Kevin Brady’s plan to hit imports with a tax while leaving exports alone. Known as the “border adjustment tax,” this idea has sparked the ire of large retail businesses such as Wal-Mart Stores Inc.; conservative Koch brothers and their industrial conglomerate Koch Industries Inc.; and the National Retail Federation, all of which bounded together to create an opposition group known as “Americans for Affordable Products.” Club for Growth and Heritage Action for America also oppose the the tax, giving the opposition added political heft.
Collectively, these groups have gone to great lengths, including buying commercial time during…