Business groups battle to save perks
Lobbyists voice concerns with panel's proposals
By Ryan J. Donmoyer
Bloomberg News
Posted October 23 2005
http://www.sun-sentinel.com/business/local/sfl-sbtaxes23oct23,0,1446642.story?coll=sfla-business-frontEven before President Bush's tax advisory panel has put its proposals on paper, business lobbying groups are fighting recommendations that may threaten their special breaks.
Within hours of the panel's Oct. 18 announcement of two proposals to rewrite current law, the National Association of Realtors protested proposed limits on mortgage interest deductions. The American Council of Life Insurers complained that plans to expand untaxed savings accounts would erode tax advantages of their products, such as annuities. And the National Retail Federation said one of the proposals would cause the price of imported goods to spike.
"The groups that would be opposed are strong enough to derail this," former Internal Revenue Service Commissioner Donald Alexander, now a partner with Akin, Gump, Strauss, Hauer & Feld in Washington, said of the panel's plan.
One of the two plans embraced by the tax panel would simplify the existing income tax system; the other would replace it with a modified flat tax. Both would eliminate many popular deductions, sharply reduce levies on investment income and fundamentally reorder business tax rules. The interest groups that are mobilizing against the proposals have a successful record of defending their tax status and have powerful allies in Congress. They collectively contributed more than $74 million to legislators' campaigns in the 2004 election, according to public disclosure filings analyzed by the Center for Responsive Politics, a Washington-based campaign-finance research group.