Lobbyists argue Warren's plan to tax federal lobbying would be unconstitutional

Lobbyists argue Warren's plan to tax federal lobbying would be unconstitutional
© Getty Images

Lobbyists lashed out at Sen. Elizabeth WarrenElizabeth Ann WarrenArtist behind gold toilet offered to Trump sells banana duct-taped to a wall for 0,000 Democratic strategist: 'Medicare for All' exposes generational gap within party Yang expands campaign with senior hires for digital operations MORE (D-Mass.) and her proposed tax on corporations and organizations that spend big bucks lobbying the federal government, arguing her plan would be unconstitutional.

“Senator Warren wants to tax people because she doesn’t like them exercising their constitutional right to petition the government. I am sure lots of people would like to tax politicians who give too many speeches, but that isn’t constitutional either,” U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley told The Hill in a statement Wednesday.

ADVERTISEMENT

Warren's plan, unveiled Wednesday morning, calls for a 35 percent tax rate on annual lobbying expenditures between $500,000 and $1 million, 60 percent for expenditures between $1 million and $5 million, and 75 percent on all lobbying costs over $5 million.

She referenced the Chamber of Commerce, the top lobbying spender, in her proposal.

The group spent more than $40.6 million in the first two quarters of 2019 and just under $95 million for all of 2018.

Other groups that spent more than $10 million in the first two quarters of 2019 include the National Association of Realtors, Pharmaceutical Research & Manufacturers of America (PhRMA), Blue Cross Blue Shield, the American Hospital Association (AHA) and the American Medical Association (AMA), according to the Center for Responsive Politics.

PhRMA declined to comment and Blue Cross Blue Shield, AHA and AMA did not respond to requests for comment.

“No matter how you spin this or what you call it, it would be an unconstitutional attack on manufacturers’ First Amendment rights. We will always speak out for our values and our people, and we refuse to be silenced,” Linda Kelly, National Association of Manufacturers senior vice president of legal, general counsel & corporate secretary, told The Hill in a statement.

The group spent $4.2 million in the first two quarters of 2019 and just under $9.5 million in 2018.

Warren's proposal is part of her anti-corruption plan, which would expand the legal definition of what constitutes a lobbyist and ban private lobbying for foreign governments, foreign individuals and foreign companies.

She also said Wednesday that she would establish a “lobbying defense trust fund” to help congressional agencies in the effort to curb corporate influence with the revenue from the tax.

Companies are not permitted to categorize political expenses like lobbying as tax-deductible business expenses, but trade associations are tax-exempt organizations. Warren's plan would not include nonprofits — 501(c)3 and 501(c)4 entities — but would include trade and professional associations, which are 501(c)6 entities.

End Citizens United, a progressive group that pushes for reforms to end political corruption, praised Warren's proposal.

“Senator Warren has said her day one priority as President would be cracking down on the corruption in Washington that rigs the system against ordinary Americans,” Tiffany Muller, End Citizens United president, said in a statement.

“Government should work for everyone, not just the corporations who can afford an army of lobbyists and this proposal would help tip the balance of power in Washington towards the people and away from corporate special interests,” she added.

In her proposal, Warren also mentioned Koch Industries, which spent more than $7 million in the first two quarters of 2019; Pfizer, which also spent just over $7 million; and Boeing, which spent more than $7.2 million.

Koch Industries declined to comment and Pfizer and Boeing did not respond to requests for comment.

“I'm a big believer that the right to free speech and ability to petition the government was the First Amendment for a reason and any attempt to limit it is a bad idea and hurts our democracy,” lobbyist headhunter Ivan Adler said.

Warren's campaign did not immediately respond to a request for comment.

One Republican lobbyist said Warren's proposal would likely be defeated in court if it were enacted.

“The courts decided that speech is protected and this is wrong-headed on its face,” the lobbyist said.

Warren’s campaign said if her proposed lobbying tax would have been in place over the past 10 years, it would have applied to more than 1,600 organizations and generated $10 billion.