WASHINGTON – Corporations are people, my friend. And this is where they feed.
Room 1100 of the Longworth Building, with its ionic columns, gilt-fringed curtains and eagle-topped frieze, has for 80 years been the home of the tax-writing House Ways and Means Committee. But perhaps never before have corporations wielded their power as openly as they have here this week.
As the panel moves to approve the Republican tax plan, this is the room where it happens – where the rich will get richer, where everybody else will be forced to shoulder a greater share of the tax burden, and where a trillion dollars of tax breaks for corporations are being passed by lawmakers who work for these very corporations.
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In one case, literally.
On Monday afternoon, as the committee began its markup of the tax bill, there on the top level of the dais, three seats from the chairman, munching from a bag of potato chips, was Rep. Patrick J. Tiberi, R-Ohio. Tiberi announced last month that he’s quitting Congress to lead the Ohio Business Roundtable, a group of “the CEOs of the state’s largest and most influential business enterprises.” Tiberi filed a notification with the House Ethics Committee that he was negotiating terms of employment with the group.
This isn’t illegal or against House rules. But a lawmaker drafting and passing legislation that benefits the people with whom he is negotiating the terms of his employment? That stinks.
It’s almost as bad as if, say, we had a commerce secretary who didn’t divulge that he had business ties to Vladimir Putin’s family. Or we had a president who, along with his family, used the federal government to further his personal business interests.
So it goes in this new gilded age. The $1.5 trillion tax cut has $1 trillion in corporate tax breaks. The idea was that the corporate tax rate could be lowered if you eliminated corporate tax loopholes. Now corporations will have the lower rates and the loopholes.
Individuals lose the ability to deduct state and local taxes, tax preparation, moving expenses and most medical expenses. But corporations – think of them as Very Important Persons with superhuman privileges – can still deduct these same expenses.
At Monday’s markup, Rep. Suzan DelBene, D-Wash., quizzed a tax expert on this corporate exceptionalism:
“Will a teacher in my district who buys pens, pencils and paper for his students be able to deduct these costs from his tax returns under this plan?” He will not.
“Will a corporation that buys pens, pencils and papers for its workers be able to deduct those costs from its tax returns?” It will.
“Will a firefighter in my district be able to deduct the state and local sales taxes that she pays from her tax return?” She will not.
“Will a corporation be able to deduct sales taxes on business purchases?” It will.
As the corporate welfare is doled out, the same bill widens the gap between the rich and everybody else. The liberal Institute on Taxation and Economic Policy concluded that the middle fifth of Americans would get a modest tax cut of $750 (1.4 percent of their income) in 2018, while the richest 1 percent would have a cut of $48,580 (2.4 percent of their income). Even the conservative-leaning Tax Foundation, using a more favorable methodology, acknowledges the plan would cost the federal government $989 billion over a decade.
Outnumbered Democrats can’t do anything but yammer. Rep. Mike Thompson, D-Calif., denounced the “wrongheaded, cruel, heartless” bill, which eliminates tax deductions that would have gone to those who lost their homes in fires. Rep. Ron Kind, D-Wis., has plans to introduce an amendment adding “fiscally conservative Republicans” to the endangered-species list.
Corporations have had their way with Washington before. In 2004, Rep. Billy Tauzin, R-La., caused an uproar when he quit Congress to become the top drug-industry lobbyist right after he helped to write and pass the Medicare prescription-drug expansion. He earned harsh denunciations as a symbol of Washington’s revolving door.
What’s different now is the reaction. Tiberi continues to help shepherd the corporate tax bill even after naming his corporate employer – and he is applauded. Five hours into Monday’s hearing, Democrats and Republicans alike on the panel gave Tiberi a standing ovation when he noted his upcoming retirement and thanked colleagues for their friendship. The panel’s top Democrat, Rep. Richard E. Neal, D-Mass., congratulated him on “your next endeavor.”
Good for Tiberi that he has admiring colleagues. If only those financing his next endeavor didn’t benefit so handsomely from his current one.
Follow Dana Milbank on Twitter @Milbank.