By Naomi Jagoda - 11-27-16 08:30 AM EST
Republicans' push for moving tax reform legislation in 2017 has set off a lobbying frenzy, with groups angling to get in front of lawmakers and their staffs.
Some groups have long sought tax changes and are excited to make the case for their priorities to be included in legislation. But groups are also concerned that tax preferences they like in the current code will be limited or repealed.
The prospects for tax reform greatly increased with Donald Trump winning the presidential election and Republicans maintaining their majorities in the House and Senate.
House Republicans released a tax-reform blueprint in June that is expected to serve as the basis for legislation in the chamber. The blueprint would lower rates for individuals and businesses, and it would also repeal "special-interest provisions."
Since the plan's release, staff members for the House Ways and Means Committee have been meeting with groups about the blueprint to get their feedback.
Now, with the prospect of tax reform on the horizon, those groups are stepping up their efforts, and others are jumping in to make their case on Capitol Hill.
"I think you're already starting to see it," said Sage Eastman, a lobbyist at Mehlman Castagnetti and a former senior counselor on the Ways and Means Committee, about the lobbying efforts.
Marc Gerson, vice chair of the tax department at Miller & Chevalier and a former tax counsel to the Ways and Means Committee, said that groups are feeling the pressure to meet with lawmakers and congressional staff quickly.
"There's this real push to get in now," he said.
Gerson said that one part of the blueprint that has generated dialogue between stakeholders and congressional staff is the proposal for "border adjustments."
Under this proposal, exports wouldn't face U.S. taxes regardless of where they were produced. Imports, though, would be taxed in the U.S. no matter where the goods were made.
The border adjustment measure was not in previous tax proposals. As a result, congressional staffers have been explaining how it would work to business groups, who are providing feedback on how the proposal could affect them, Gerson said.
In many cases, groups have more than one priority for tax reform. Groups may be excited about the chance to provide input into tax reform legislation while also worrying about being one of tax reform's losers at the same time.
"People want to play the game, but people don't want to lose the game," Eastman said.
The business community is generally excited about the chance for tax reform, particularly because businesses view the current tax code as uncompetitive.
Top priorities for business groups include lower rates for corporations and pass-through businesses, a strong system for businesses to recover the costs of their capital investments and a territorial system that does not tax U.S. companies' foreign earnings.
The House GOP blueprint reflects these priorities, but the document isn't very detailed and the specifics of those proposals and the transition rules from the current tax code to a new system are important, said Dorothy Coleman, vice president of tax and domestic economic policy for the National Association of Manufacturers (NAM).
"We're certainly gearing up and stepping up our efforts," she said. NAM has already been discussing its priorities with congressional staff, and shared its priorities with the presidential campaigns during the election, she added.
The housing industry is also likely to be active in advocating for its tax-reform priorities.
The mortgage-interest deduction is one of the largest preferences in the tax code, and House Republicans have said they would maintain it. But under the blueprint, fewer people would be itemizing and using the mortgage-interest deduction because the standard deduction would be larger.
"We are concerned that it's diluted greatly by the increase in the standard deduction," said National Association of Home Builders (NAHB) CEO Jerry Howard.
Their group wants to make sure that a new tax code has provisions that promote home-ownership, he added.
Home builders also want to make sure that Low Income Housing Tax Credits - which are used to finance affordable housing - are preserved, and the group is concerned because the credit is not mentioned in the House GOP blueprint. They also want tax reform to lower rates for pass-through businesses as well as corporations, Howard said.
To get their points across to Congress, "we'll meet with every lawmaker if we have to," Howard vowed.
Another sector that is ramping up its advocacy efforts is the nonprofit community.
The deduction for charitable contributions isn't repealed in the blueprint, and the document says Ways and Means staff will work to make the tax benefit for donating to charity "effective and efficient."
Steve Taylor, senior vice president and counsel for public policy at United Way Worldwide, said his group wants people to be able to take the charitable contribution deduction regardless of whether they itemize. He also said there could be opportunities to expand charitable giving incentives as part of tax reform.
"At a time when federal spending on social service programs is decreasing, it would then be really destructive for Congress to decrease incentives for private charitable giving," Taylor said.
United Way is also pushing for tax reform to include expansions of the earned income tax credit and the child tax credit, which benefit low-income families.
The nonprofit plans to step up its advocacy efforts in the coming months, including by having local United Way groups reach out to their lawmakers, Taylor said.
One tax preference that could be on the chopping block in a reform package is the municipal bond tax exemption. The blueprint doesn't specifically mention it, but past tax proposals have suggested limiting or eliminating the exemption.
Supporters of the exemption say that it helps to make financing infrastructure projects less expensive for state and local governments. They are planning to keep pressing their case to congressional staff in the coming months.
"We're taking every opportunity to enhance our efforts and not let a minute go by," said Jessica Giroux, general counsel for the Bond Dealers of America.
And as tax reform efforts heat up in Congress and the White House, even more groups across a wide array of industries are likely to ramp up their efforts.
Eastman said it was only the beginning as groups await details on the tax plans.
"The intensity and the lobbying around various provisions will increase," he predicted.