the national interest

Today’s Window Into the Washington Bubble

Businessmen shaking hands in office lobby
Photo: Johnny Greig/iStockphoto

One thing that helps to explain how American politics work is that anything that looks from the outside like a cloistered bubble of absurd privilege probably feels on the inside like a refuge of sanity forever warding off angry hordes. The Hill, a newspaper covering Congress, has an article on the plight of tax lobbyists that usefully illustrates the way the world looks from inside the bubble.

The headline, “‘Here we go again’ says K Street as Democrats renew push for tax hikes,” reflects the tone of the story, which conveys a sense of exasperation that business interests must again ward off proposals to limit their special treatment. Here are the sources quoted in the story:

1. J.P. Delmore, a tax lobbyist with the National Association of Home Builders, who says, “It’s clear that there is still some education that we have to do. There’s a misperception that the users are these extremely wealthy individuals.”

2. Dan Hubbard of the National Business Aviation Association, who reports, “The manufacture and use of these airplanes is an important ingredient in economic recovery.” And who better to evaluate the importance of the aviation industry to the overall economy than the National Business Aviation Association?

3. Jim Richmond, the CEO of Washington State–based plane-maker Cub Crafters, who tells Hill readers, “Some manufacturers rely heavily on this accelerated depreciation schedule in their business model. Without it there will be many more lay-offs in the corporate and business jet industry.”

4. Noah Theran, spokesman for the Private Equity Growth Capital Council, who adds, “Increasing taxes on carried interest would negatively impact capital investment, including private equity, real estate and venture capital … Our goal is to ensure that policies affecting our industry are based on facts and an understanding of the benefits of private equity and growth capital investment.” That ought to reassure anyone who suspects the Private Equity Growth Capital Council is advancing some narrow economic interest.

The story quotes no economists or tax-policy experts to evaluate the merits of the loopholes in question. The author of the story seems to blend his own perspective with that of the sources, reporting that the private-equity industry is “mounting its own attempt to school Congress on the impact of ending the tax breaks,” as though the industry were helpfully sharing its disinterested knowledge. “Lobbyists say Democrats and Republicans fail to understand the economic benefits of these tax breaks, but nonetheless they continue to come out and try to close them.” It may seem to the outside world that lobbyists have too much power, but in the parts where that power counts, it often seems they have too little.