K Street counting on Senate to pare back Democrats’ tax plan - POLITICO

The draft text released by House Ways and Means Chair Richard Neal this week included milder tax hits in most circumstances than the White House proposed earlier this year.

In interviews this week, lobbyists representing a range of business interests said they aren’t too worried about the party’s opening salvo on tax increases, confident the bill — and the threats their clients insist it poses — will be pared back in order to thread its way through a narrowly divided House and Senate.

“This is the beginning of the process,” said Arshi Siddiqui, a partner at one of Washington’s top lobbying firms, Akin Gump Strauss Hauer & Feld, and a former aide to House Speaker Nancy Pelosi.

House Democrats have proposed just over $2 trillion worth of tax increases in legislation unveiled Monday, according to the nonpartisan Joint Committee on Taxation, roughly split between corporate tax provisions despised by powerful Washington business groups and individual rate hikes aimed at the country’s biggest earners.

The draft text released by House Ways and Means Chair Richard Neal (D-Mass.) this week included milder tax hits in most circumstances than the White House proposed earlier this year.

And his Senate counterpart, Finance Chair Ron Wyden (D-Ore.), has proposed his own tax plans, despite efforts by Democrats in each chamber to “pre-conference” their bills to minimize differences and speed the process wherever possible.

President Joe Biden warned earlier this month that Democrats’ plans to hike taxes on corporations and the wealthiest Americans earlier would face well-funded opposition.

“Some big corporations are spending millions of dollars in — legitimately, I mean, they’re lobbying — to try to escape their obligation to pay the taxes they owe, leaving working families to pay a larger share of the burden,” he said at the White House in remarks on the August jobs report.

“The question is the size and scope of what ultimately passes Congress,” said Siddiqui.

“It’s not passing at all like this in the Senate,” they said of Neal’s tax plans, calling it “laughable” that House Democrats are “even thinking about this.”.

The lobbyist expressed surprise that Democrats would put vulnerable House moderates in the position of voting on a corporate tax rate higher than what Manchin, who could single handedly sink the bill in the Senate, previously said he would support.

In interviews this week, lobbyists were also bewildered by House Democrats’ plans to enact nearly $100 billion in new taxes on tobacco and nicotine products, calling the proposal hard to square with Biden’s campaign vow that no taxpayer earning less than $400,000 a year would see their taxes increase as a result of the reconciliation bill.

While K Street was largely in agreement that Democrats’ lofty tax and spending plans will be scaled back, there is less consensus around the final price tag, if the bill even makes it to Biden’s desk at all.

He hosted two of Senate Democrats’ biggest wild cards — Manchin and Arizona Sen.

Typically, “whoever gets burned in the House runs to the Senate [and] screams the loudest,” the veteran tax lobbyist said.

There’s still a “narrow window” for securing revisions, said David Skillman, a former Ways and Means staffer now at the law and lobbying firm Arnold & Porter.

"We are in conversations with the administration on reporting proposals that target sophisticated tax avoidance and evasion without impacting middle class and working Americans,” Neal said at the Ways and Means markup.

And even as much of corporate America howls at Democrats’ tax plans, the response from the left has been tepid, underscoring the treacherous path ahead for the party