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Senators reforming tax code plan to hide from special


Posted: Jul 29, 2013

Senators Really Don't Want You to Know How They're Reforming Taxes

Lawmakers' suggestions for removing or keeping loopholes for special interests will be hidden from all but 10 staffers for 50 years.
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"Now this is just between us, right, Max?" "Of course, Orrin." (Reuters)

The Senate is engaging in a tax-reform process with a witness-protection-like level of secrecy. For 50 years, no one, except 10 staffers, will know what breaks and deductions each senator decided to excise from the tax code. It's lawmaking of the opaquest sort, but it is easy to see why tax-code suggestions are mired in such risk for lawmakers.

Lobbying is an enormously powerful and profitable business. In 2012, interests groups spent $3.3 billion telling their lawmakers how the law can better work for them -- and not just on tax issues. That sounds like a lot, but for industry, it is definitely worth it. For every dollar an interest group invests in lobbying, it can expect a return of $220 in tax breaks, according to researchers at the University of Kansas. That's a 22,000 percent return on investment on an of aggregate of 90 firms in the sample.

So how would those lobbying firms feel if Congress swept out from under them the breaks that they paid so effectively for? Enter the witness protection.

Senators, led by Democrat Max Baucus and Republican Orrin Hatch, want to rework the nation's tax code. They have opted for a "blank slate," which means they want to redesign the tax structure from the bottom up. The goal is to pass a tax overhaul by the end of the year. Senators have until the end of this week to submit their proposals laying out what they think should remain in the tax code. 

With the weight held by the special interests, this is dangerous work for senators. So dangerous, indeed, that their decisions will be locked away for 50 years and kept in total secrecyThe Hill reports that "each submission will also be given its own ID number and be kept on password-protected servers, with printed versions kept in locked safes."

The senators will make decisions that some interests groups are sure to hate. And it's easy to understand why they want cover, lest they give perfect fodder for industry-fueled attack ads come campaign season.

"The letter was done at the request of offices to provide some assurance that the committee would not make their submissions public," an aide told The Hill. "Senators Baucus and Hatch are going out of their way to assure their colleagues they will keep the submissions in confidence."

The youngest senator is 39. There's virtually no chance that the Senate's tax decisions this week will come back to haunt even him. And by the time the National Archives releases the records, surely no one will care. (We will, however, try to update this story at that time.)

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