The U.S. Chamber of Commerce on Sunday once again put the members of Congress on notice that if they can’t pass a tax reform bill this session, it will use its considerable stash of political cash to buy a new Congress that will.
The threat, delivered in an interview on C-Span -- conducted by my colleague Heather Long and Sahil Kapur of Bloomberg News -- of the business lobby’s grandly titled Chief Policy Officer Neil Bradley, echoed the message delivered to Capitol Hill earlier in the summer by the business lobby’s longtime president, Thomas Donohue, who chastised the lawmakers for their inability to govern by striking compromises and making hard choices. “Members of Congress be warned,” Donohue declared in the final sentence of his missive, “failure is not an option.”
Imagine my surprise, then, when I went to the Chamber’s website looking for its tax reform proposal — or, if not a full-blown proposal, at least some hint of the economic trade-offs and hard political choices its members are willing to accept — only to come up with fine-sounding platitudes but no specifics.
(If you want to read them, here and here are the most comprehensive of the Chamber’s recent statements on tax reform.)
Will the Chamber, which has been wringing its hands over federal deficits for decades, insist that any reformed tax code raise as much revenue for the government as the current, unreformed tax code? The Chamber won’t say.
Will it be willing to pay for lower rates on corporations and individuals by closing some of those loopholes that its corporate members have fought so hard to create and protect all these years — and if so, which ones? The Chamber won’t say.
Chamber officials cheered when the Trump administration earlier this year came out in favor of reducing the statutory tax rate on corporate profits from 35 percent to 15 percent. Would the Chamber, then, be in favor of raising taxes on corporations that, because of loopholes, now pay an effective tax rate below 15 percent? The Chamber’s not saying.
Would the pro-growth tax reform that the Chamber demands end deductions for corporate interest payments that now encourage companies to raise capital by borrowing rather than raising equity from investors? Almost every serious economist supports such a reform. The Chamber, however, has yet to take a position.
Will the Chamber insist that if the corporate tax rate is lowered, the owners of small businesses, partnerships and private-equity funds who don’t pay any corporate tax will also get a tax cut? The Chamber doesn’t say.
The Chamber has said it favors a “territorial” tax system that would not impose any tax on the overseas profits of U.S. corporations. Would that apply to profits a company earned by firing American workers and shifting production overseas? Will it apply to profits shifted by legal slight of hand to tax havens where the local tax rate is zero and no work is actually done? The Chamber didn't say how it would end this unequal treatment of business income and rationalize the taxation of both corporate and non-corporate profits.
If the current top personal tax rate is now too high at nearly 40 percent, as Chamber officials have suggested, what rate should it be lowered to? The Chamber’s official documents have nothing to offer on how much personal rates should be cut, or how it would prevent wealthy taxpayers from using tax shelters to transform personal income into lower-taxed business income.
When it comes to tax reform, in other words, the U.S. Chamber of Commerce is hardly a profile in courage. The reason is simple: the Chamber’s own members can’t agree among themselves on what tax reform ought to include.
So it’s rather rich, don’t you think, that the Chamber is about to run millions of dollars in TV ads touting the urgency of tax reform, while its officials criticize members of Congress for failing to show the leadership and make the compromises, to make tax reform happen. More and more, the Chamber gives the impression of a once mighty institution sliding into political and intellectual irrelevancy. Rather than worrying about reforming the tax code, or the Congress, maybe the Chamber ought to work on reforming itself.
Update: In a statement, the Chamber stated: “The U.S. Chamber has been working to advance pro-growth tax reform for years. While Congress, not the Chamber, is tasked with drafting legislation, we certainly have not been silent on the details of tax reform. The Chamber has been advocating for lower tax rates for businesses big and small, a globally competitive system, faster write-offs of investments, and permanent reforms that give businesses the certainty they need to grow and hire. And we have made clear that we are ready to support the tough trade-offs necessary to make those changes possible. The columnist’s suggestion that the leading voice for business owners has been silent during the lead up to tax reform is as ludicrous as someone saying our antiquated tax code doesn’t need to be updated.”