The Politics of Tax Reform

Playing the Tax Break Game


ROBERT MENENDEZ (D), New Jersey
Championed a temporary tax credit to allow small companies to offset a portion of investments in therapies to prevent and treat acute and chronic diseases. The pharmaceutical industry contributed $434,043 to his campaign and leadership PAC for the 2010 elections. Several drugmakers, including Merck (MRK) and Johnson & Johnson (JNJ), are based in New Jersey.

DEBBIE STABENOW (D), Michigan
Sponsored a bill to give consumers a tax rebate of up to $7,500 toward the purchase of hybrid gas-electric cars or trucks. The Chevy Volt plug-in model, made by Detroit-based General Motors (GM), hit showrooms in November. GM employees gave $84,635 to Stabenow between 1995 and 2010, more than workers from any other company.

CHARLES E. SCHUMER (D), New York
Pushed to ensure that proposals to tax carried interest of private equity fund managers at ordinary income rates also extended to partnerships in real estate and in the oil and gas industry. Republicans said Schumer's move made the tax increase harder to pass. It died last session. Schumer has received $8.8 million from the securities and investment industry since 1989.

RON WYDEN (D), Oregon
Supports preserving the Internet tax moratorium, which blocks most states from imposing taxes on Web access fees. The Portland (Ore.) area is home to a cluster of technology operations—including a major Intel (INTC) plant—known as Silicon Forest. The tech industry has given $416,423 to Wyden's campaigns since 1989, one of his largest sources of campaign cash.

JOHN F. KERRY (D), Massachusetts
Co-authored a bill with Republican Mike Crapo to reduce excise taxes for small "craft" brewers. There are 38 small breweries in Massachusetts, including Samuel Adams (SAM), the country's largest microbrewery, and 12 breweries in Idaho, which ranks third in U.S. production of hops, a primary ingredient in beer.

MAX BAUCUS (D), Montana, chairman
Obtained a provision in the farm bill for tax-exempt "forestry conservation bonds" to help purchase a 500-square-mile patchwork of land owned by Plum Creek Timber (PCL). Plum Creek, the biggest private landowner in Montana, spent $3.7 million on lobbying from 2006 to 2010, and its employees have contributed $19,100 to Baucus's campaigns.

CHARLES GRASSLEY (R), Iowa
Backs tax credits for U.S. producers of corn-based ethanol and tariffs on ethanol imports. Iowa's ethanol industry encompasses 40 plants producing more than 3.5 billion gallons of ethanol a year and using more than 1.1 billion bushels of corn, according to an industry trade group. Grassley received $290,250 from agriculture PACs for the 2010 election.

OLYMPIA J. SNOWE (R), Maine
Pushed for tax provisions to help small businesses, including Maine fishermen. One allows companies to immediately write off up to $250,000 in new investment. She helped defeat a proposal in 2010 that would have raised taxes on professional-services businesses such as architecture firms.

JON KYL (R), Arizona
The No. 2 Senate Republican is a top proponent of cutting taxes on inherited wealth. He helped preserve a one-year repeal of the estate tax in 2010, then cut a deal with President Obama to set the estate tax rate at 35 percent for 2011 and 2012. Eliminating the estate tax was a priority of the Club for Growth, which has donated $155,753 to Kyl since 1989.

MIKE CRAPO (R), Idaho
Wants to give the same tax breaks to geothermal power producers that are available for solar energy and fuel-cell technologies. There are 12 geothermal projects being developed in Idaho, which ranks third among 12 Western states in geothermal power potential, according to the Western Governors Assn.

JOHN ENSIGN (R), Nevada
Seeks to preserve favorable tax treatment in the Federal Aviation Administration reauthorization bill for small air-sightseeing tour companies in southern Nevada. Nevada officials attribute 427,000 jobs in the state and $2.4 billion in state and local tax revenue to the tourism industry.

JOHN CORNYN (R), Texas
Opposes the President's efforts to repeal oil- and gas-industry tax breaks. He criticized the Administration's temporary ban on deepwater oil drilling following the BP (BP) oil spill, saying it would "likely destroy tens of thousands of jobs." Oil and gas interests have given $1.7 million to Cornyn since 2001, more than any other industry.

Note: All data on campaign donations are from the Center for Responsive Politics

Giroux is an analyst for Bloomberg Government.
Salant is a reporter for Bloomberg News in Washington.

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