A coalition of some of the biggest business interests has hired former Ways and Means Committee ranking member Jim McCrery (R-La.) to lobby for extending George W. Bush-era capital gains and dividend tax cuts.
McCrery was a senior member of the powerful tax-writing panel when the cuts were first made in 2003, handing then-President Bush a major domestic policy victory.
After more than 20 years in Congress, the last two as ranking member of the committee, McCrery retired at the end of 2008.
He’ll now lend a powerful voice to the push for extending the tax cuts.
“I’m delighted to be representing the coalition in this effort because I think it’s important policy,” McCrery told The Hill. McCrery joined the firm Capitol Counsel LLC in 2009, and his one-year ban on lobbying expired in January.
McCrery and Capitol Counsel are working for the Alliance for Savings and Investment (ASI), which includes major banking, securities and energy interests, among others, that are opposed to letting the tax cuts expire as scheduled at the end of 2010.
The Obama administration wants to allow capital gains and dividends taxes to increase in 2011 from 15 percent to 20 for high-income households making $250,000 or more. If Congress does not act, the capital gains rate will revert to 20 percent for most filers and dividends will be taxed at the income tax rate, or 39.6 percent at the highest level.
Business interests have long supported an extension of the two tax cuts, but with the rates expected to rise in 2011, they are now pushing more loudly on Capitol Hill.
The ASI coalition has been around for several years; coalition members played a large role in the first cuts in 2003 and in their extension in 2006. Now the group is looking to press lawmakers to keep the current tax rates rather than allow them to increase.
The coalition includes the Securities Industry & Financial Markets Association (SIFMA), Edison Electric Institute (EEI), Investment Company Institute (ICI), Verizon and Financial Services Forum, among other interests, McCrery said.
The alliance also decided this year to increase its media budget with the Glover Park Group, the Democrat-heavy strategy firm, which began working for the group in 2009.
The alliance is looking to expand its ranks and add other businesses and trade associations to help lobby for the extension of the tax cuts.
“We hope that within a fairly short period of time that list will be larger,” McCrery said.
Coalition members began meeting with some congressional staff on Tuesday, and the group is still developing its lobbying and media efforts.
“We’re just now really getting the coalition to focus on what the lay of the land is legislatively, what our strategy is going to be going forward,” McCrery said. “We haven’t really come together completely on all of our messages, but we’re getting closer.”
McCrery said that he was looking forward to lobbying on the issue after he played a key role with former Ways and Means Chairman Bill Thomas (R-Calif.) to reduce the tax rates. McCrery said that he had originally wanted to set taxes on dividends at zero.
McCrery said a key aspect of the cuts under the Bush administration was to link capital gains and dividends policy. If Congress does not act and the tax rates revert to pre-2003 policy, the rates would be imposed at different levels.
Opponents of the dividend tax increase argue that it would hurt the middle class and companies that rely on investments to help them grow.
“Just as a matter of equity and fairness, we think it’s just not a great time to be looking at a potentially significant increase in federal income tax liability if you’re holding dividends not just in utilities but in any investments that pay dividends,” said Jim Owens, spokesman for EEI.