Last week, RedState’s Ben Howe exposed how House tax bill writers proposed nixing the adoption tax credit to “save money” while at the same time going out of their way to preserve a tax loophole benefiting Bermudan insurance companies and clever hedge fund guys who have also used it to avoid tax.
The Senate tax bill, passed just days ago, nixed that loophole. The Washington Examiner‘s Tim Carney had an interesting scoop about the behind-the-scenes lobbying effort taking place to try to push the Senate to reverse course, and keep the loophole.
But beyond the possible efforts of American Council of Life Insurers lobbyists to keep the provision, little was known until now about exactly why it was kept in the House version. A little bit of digging and asking around has now delivered the answer– and it looks like the usual dirty, swampy bullcrap everyone has gotten used to in Washington, D.C.
Rep. Kevin Brady chairs the House Ways and Means Committee. That means he is the House’s top tax law-writer, and the chief architect of the House tax reform bill.
Rep. Kevin Brady also employs as his right-hand woman a lady called Barbara Angus, who is his Chief Tax Counsel.
In addition to being one of the world’s four biggest accounting firms, which happens to provide tax avoidance advice to high net worth individuals like those using the Bermuda reinsurance loophole tax dodge, probably on the advice of Ernst & Young tax advisors, Ernst & Young also lobbies on tax issues.
One of Ernst & Young’s lobbyists on tax reform is a guy called Nick Giordano.He’s registered to lobby on behalf of the Association of Bermuda Insurers and Reinsurers, along with his colleagues Tara Bradshaw and Jeffrey Levey. Open Secrets also shows Jeff Levey lobbying for the Association of Bermuda Insurers and Reinsurers.
And guess who Barbara Angus worked with closely when she was at Ernst & Young (again, her job immediately prior to going to work for Brady)?
That’s right: Nick Giordano.
So it’s pretty clear what happened here: Republicans took a look at getting rid of a very un-#MAGA-like loophole– and as Carney noted, there has been the subject of “a bipartisan push for at least a decade to close” it because tax reform inherently involves “Mak[ing] the tax base broader and more equal, while lowering rates.” And then Nick Giordano went and lobbied his former close colleague and Rep. Brady’s Chief Tax Counsel Barbara Angus to keep it. And the House tax “reform” bill magically kept the provision, which is worth $900 million a year, while scrubbing the measly $300 million-a-year adoption tax credit to “save money.”
The big question now is whether the Senate or the House will win out where this Bermuda provision is concerned. As noted, the Senate wants the loophole nixed; the House should, too, regardless of where Angus and her former colleagues at Ernst & Young sit on the matter.
You can call Rep. Brady to discuss this, or any other tax matters, on (202) 225-4901.