Tax Bill Prompts Business to Pay Heavily for Lobbying Campaigns

(Bloomberg) -- Three groups seeking to influence the most extensive changes to the American tax code since the 1980’s spent more than $56 million on their lobbying efforts in the last three months of 2017, according to disclosures filed with the federal government.

The spending by the U.S. Chamber of Commerce, the National Association of Realtors and the Business Roundtable, the last of which set a quarterly record, capped a big year of lobbying expenditures by corporate interests as President Donald Trump pursued pro-business tax reform and a regulatory rollback in his first year in office.

Beginning in the last week of September with a nine-page outline for a tax overhaul, Republicans in Congress took less than 90 days to pass a final bill that provided a deep, permanent tax cut for corporations, as well as shorter-term relief for individuals.

During the quarter, the roundtable, a group made up of more than 200 chief executives, spent $17.35 million, more than quadrupling its spending from the same period a year earlier as the organization’s chairman, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, sought to increase its lobbying clout and push the tax legislation over the finish line.

The disclosures reflect lobbying on all issues, but the tax overhaul was a top priority for a broad set of companies and trade groups.

The Realtors group spent more than $54 million for the year, including more than $22 million in the fourth quarter. It led opposition to proposals to limit a deduction for state-and-local taxes, or SALT, which it said would hurt the home market.

The association eventually cofounded a coalition to fight the state-and-local tax proposals. Another founder of the coalition, the American Federation of Teachers, also set a quarterly record, spending more than $500,000.

The debate initially caused some Republican members of Congress to drop support for the bill, although the final compromise, which capped a SALT deduction at $10,000, brought enough of them back for the legislation to pass.

The chamber, which was the number-one lobbying spender in each of the first three quarters of 2017, spent more than $16.8 million in the fourth quarter, bringing its lobbying total for the year to nearly $59 million. It spent much of the fourth quarter pushing for permanent tax cuts that it said should bolster investment and reform international taxation.

Because of the variety of its members, it did not lobby on specific provisions, the group has said, although it did help companies that wanted to negotiate transitions to the new rules plead their cases to lawmakers.

The National Association of Home Builders, which found itself working both for and against the tax bill at different times, spent nearly $1.7 million during the quarter.

In September, CEO Jerry Howard told Bloomberg that the group was “at DEFCON One” to support or oppose a bill even as it harbored significant concerns over a deduction for mortgage interest. The association, which was then negotiating with the congressional leadership to craft a new tax break for home ownership, later “enthusiastically” backed Trump’s outline for changes, only to find itself at what Howard described as a “hell no” when the break for home ownership fell through.

After lobbying efforts that, according to Howard, included emailing and texting with congressional staff members right through a conference that resolved differences between the House and Senate tax proposals in the closing days of the process, the home builders supported the final bill.

The lobbying on taxes coincided with fourth-quarter increases in lobbying from technology companies as some of them increasingly faced public scrutiny over their size, Russia’s use of their platforms to meddle in the 2016 election, and extremist content online.

Alphabet Inc.’s Google spent $4.42 million during the quarter, up from $3.81 million during the fourth quarter of 2016. The company spent more than $18 million in 2017, during which it also hired several new outside lobbyists.

At the end of October, a company executive, alongside executives from Facebook Inc. and Twitter Inc., testified before Congress on Russian activities on their platforms. Facebook spent more than $3 million during the quarter, and a record of more than $11.5 million during the year.

As a result of the scrutiny, the House and Senate also introduced bills that would regulate online campaign advertising. Facebook and other tech companies suggested changes in their own policies and a self-regulatory regime would be preferable.

In addition, tech platforms also spent time fighting a proposal to curb online sex trafficking because it would curtail liability protections that online platforms enjoy with regard to content that their users post. In November, Facebook and the Internet Association trade group, which represents the companies, backed a Senate compromise on the bill, which now has enough votes to pass.

Apple Inc. also set an annual lobbying record, spending more than $7 million. The company announced earlier this month it would bring hundreds of billions of dollars currently stored overseas back to the United States, where it will pay about $38 billion in taxes and spend more on domestic jobs and offices. The announcement prompted Trump to tweet that the Republican-backed tax-reform was the incentive for Apple’s investments.

©2018 Bloomberg L.P.