The tax plan before Congress, though sold as broad legislation to reduce rates and end favoritism in the tax code, contains targeted provisions designed to benefit special interest groups, many of which maintain close ties to senior Republican lawmakers.
Take, for example, the special tax cut for the alcohol industry hidden in the bill.
The tax cut legislation includes a provision that cuts taxes on beer, wine, and liquor produced or imported into the country, saving companies involved around $4.2 billion over 10 years. The provision mirrors language from the Craft Beverage Modernization and Tax Reform Act, or S. 236, introduced by Sen. Roy Blunt, a Republican from Missouri and a member of the Senate GOP leadership team. (While the legislation does benefit craft, or small breweries, it extends the cuts to larger companies and the industry as a whole.)
Key GOP lawmakers maintain close ties to individuals connected to the booze industry.
Sen. Blunt’s son Andy Blunt is a registered lobbyist for MillerCoors, a brewing company that has worked to build support on Capitol Hill for the exact same targeted brewer tax cuts now included in the tax bill. Sen. John McCain, R-Ariz., whose support for the tax bill was initially in doubt, before he backed it this week, is married to Cindy McCain, the owner of Hensley Beverage, a major beer distributor. Hensley Beverage’s trade group, National Beer Wholesalers Association, lobbied in support of the very same special tax cuts that are in the bill.
Sen. Rob Portman, the Republican lawmaker and member of the Senate Finance Committee who championed the inclusion of the beer tax break, is no stranger to the industry either. Look no further than Fierce Government Relations, a corporate lobbying firm that has donated generously to Portman’s election committee and lobbied lawmakers on behalf of MillerCoors on the tax reform legislation. Portman’s own Chief of Staff Mark Isakowitz is a former partner at the firm who took a $6.8 million payout to begin working for Portman.
Isakowitz’s old lobbying firm also represents Delta Airlines, which won an unusual concession in the tax cut legislation designed to penalize foreign competition. The provision forces foreign-based airlines, such as Qatar Airways and Etihad, to pay corporate taxes on money earned while flying to the U.S. Delta has worked with other U.S.-based airline companies American Airlines and United Airlines to stifle competition from foreign airlines, primarily those based in the Persian Gulf, though it appears Delta may have flown solo on this effort.
The airline provision was inserted by Sen. Johnny Isakson of Georgia, a Republican who maintains close ties to Delta. The airline, based in Georgia, has provided $137,364 campaign dollars to Iskason, making it one of his largest lifetime contributors. (Isakson’s former congressional staffer, Tyler Stephens, is also working at Fierce Government Relations as a lobbyist for Delta.)
Then there’s the language that opens up drilling in the Alaska National Wildlife Refuge, a provision that is wholly unrelated to tax reform but was crafted by Sen. Lisa Murkowski, the Alaska Republican who has made ANWR drilling a career-long cause, and whose vote was helped along by adding in the provision.
While drilling in the protected wildlife region has been a special priority for Murkowski, oil executives that share the goal have long cultivated ties with her family.
Murkowski’s sister works for the Waterfall Foundation, an Alaska-based charity that raises funds for breast cancer with donations from ExxonMobil, ConocoPhillips, BP, and Royal Dutch Shell, firms that have expressed interest in the past in expanded Alaska drilling. Andrew Lundquist, senior vice president for government affairs at ConocoPhillips, has long served as a board member to the Waterfall Foundation and is one of the biggest players behind the scenes working for decades to open up ANWR for oil exploration. An investigation from ProPublica found that Lundquist has been a tireless advocate of drilling in protected lands, even managing the Dick Cheney-led energy effort that called for opening up ANWR.
It’s possible other pivotal GOP senators are influenced by their lobbyist family members, but most have deregistered in recent years, making their activities difficult to track. Senate Finance Committee Chair Sen. Orrin Hatch has a son, Scott Hatch, who no longer registers as a lobbyist. Senate Finance Committee member Sen. Pat Roberts, R-Kansas, also has a lobbyist son, David Roberts, but he no longer registers although he visibly works at a powerhouse lobbying firm.
The tax legislation, a sprawling bill that not only changes tax rates but fundamentally reorders American society in many ways, has been rushed through with hardly any public hearings or congressional debate. Given the opaque nature of the bill, it is difficult to understand why certain provisions were included, or why certain industries are favored while others are penalized.
Some targeted provisions appear simply as the result of sustained lobbying by industry. Portman’s influence on the bill, for instance, includes a provision clarifying the tax rules to ensure that private jet owners do not have to pay certain management fees to store their aircraft. The provision comes as a number of private jet operators based in Ohio have maintained a sustained lobbying effort to influence Portman and other Ohio legislators, including Sen. Sherrod Brown, a Democrat who ended up voting against the overall tax bill, and it so happens that Portman was able to hold wide sway over tax legislation.