In his quest to simplify the code for families, Camp, chairman of the powerful Ways and Means Committee, would trim some longstanding perks benefiting the real estate and private equity and investment industries: the mortgage interest and carried interest deductions. A tribe of lobbyists is pressing conservatives to snuff Camp’s proposal, threatening to withhold precious campaign dollars.
Cuts to the carried interest deduction, which allows private equity managers to pay a lower tax rate than other workers on about one-third of their income, would only affect a tiny — but generally very wealthy — proportion of the population.
In both instances, those who would feel the pain have long experience using cash and K Street to make themselves heard.
Private equity contributions skyrocketed to $ 70.8 million in 2012, up 143 percent from the previous presidential cycle.
The industry gave to both parties, but favored Republicans at a two-to-one rate. PEGCC, the trade group of private equity firms, contributed $ 300,000, more evenly split between the parties.
The industry was exceptionally generous to outside spending groups in 2012. A number of the top donors to Restore Our Future, for instance — the super PAC backing Republican presidential nominee Mitt Romney, who had been an executive at Bain Capital — came from private equity.
For their part, real estate interests contributed $ 155.2 million in the 2012 cycle, with 65 percent of it going to Republicans. The Realtors’ trade group covered all its bases, funneling money through a PAC, super PAC, and 501(c)(6) political nonprofit.
The Realtors also fielded an army of lobbyists, the second-most of any organization in 2013. That didn’t come cheap: $ 38.6 million, or about as much as two major corporations, Northrop Grumman and Comcast, spent combined. For its part, PEGCC spent close to $ 2.4 million on lobbying last year.
The disappointment voiced by the two industries’ trade groups may be particularly apt given how generous they’ve been to Camp over the years. He has taken in about $ 3.3 million in contributions from various interests that think his bill undercuts them — including securities and investment ($ 760,616), real estate ($ 396,775), commercial banks ($ 406,975), insurance ($ 1.2 million) and lobbyists ($ 586,795).
Right after Camp revealed his proposal, Heritage Foundation economist Stephen Moore — who likes the plan — said it was about to be subjected to the “snake pit of special interest lobbyists.” Given how much is at stake for Republicans this year, they’re unlikely to want to get bitten.
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Image: Rep. Dave Camp (R-Mich.) speaks about tax reform at the Utah Valley University, August 31, 2011 (Flickr/Michael Jolly)
Real Estate, Private Equity Industries Fighting Camp"s Tax Plan
