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Political Watchdog Groups Impacting Corporate Tax

Author: Scarinci Hollenbeck, LLC

Date: December 16, 2014

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With an increasing number of Americans feeling disconnected from the political process, it is heartening to hear stories in which public opinion and political watchdog groups have a marked impact on political discourse.

According to Joshua Holland, a reporter for BillMoyers.com, that is precisely what is going on regarding the so-called tax extenders.

The tax extenders are a set of tax breaks and subsidies that have been added into the tax code over the years on a temporary basis. The majority of these cuts apply to businesses, but some are directed at citizens, like the earned income tax credit or the credit for energy-efficient appliances.

Applying these cuts temporarily was intended as a way to allow politicians to test out their effects. Instead of making them permanent, however, legislators have instead chosen to renew them on a temporary basis year after year. This has allowed them to obfuscate their effect on the federal budget and to collect contributions from companies and interest groups lobbying for their renewal.

Influencing the conversation
For the majority of their existence – some since 1981 – little public outcry or fanfare has accompanied these bills’ renewal. This was not the case this year, after two groups – Public Campaign and Americans for Tax Fairness – released a report detailing what these bills do, how much they cost and how much is spent on the lobbying campaign that is pushing them through Congress. The authors pulled data from OpenSecrets to find that 1,359 lobbyists pressed Capitol Hill on the issue between January 2011 and September 2013 – about 10 percent of all registered federal lobbyists. About 58 percent of these lobbyists had worked for Congress or the executive branch at some point.

Writing the report was one thing, but influencing public opinion was another, according to BillMoyers.com.

“We did as much retail work as possible,” Frank Clemente of Americans for Tax Fairness told the news source. “We held press briefings and did one-on-ones with reporters to make sure that they understood the story. It’s like grassroots organizing – you have to do a lot of organizing to get the media engaged on issues like this.”

While challenging, it appears that the authors’ efforts paid off. The recent efforts to make the tax extenders permanent – conspicuously missing breaks for low income families – have been met with extreme public scrutiny. Those breaks may still pass in some form, but at minimum public controversy will prevent them from passing without notice.

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