This column could wind up costing The Record a lot of money. No, I am not about to libel anybody, nor am I the kind of writer who can command large payments from newspapers for his work. Just the same, if I say the wrong thing it could cost this paper a lot of money, by causing the IRS to label it a lobbyist.
Now wait just a minute, you say. A newspaper can’t be a lobbyist. Lobbyists are those slick people with fat expense accounts, and they’re usually paid by some foreign country, like Japan, in a never-ending campaign to destroy U.S. businesses and create an even greater foreign trade imbalance.
Unfortunately, under a law that went into effect on January 1, the definition of lobbyist was simplified: Anyone who spends more than 5 percent of their time advancing or opposing the passage of legislation at the federal or state level is a lobbyist. Where the expense comes in is that the costs associated with lobbying activities, salaries, support staff, even research planning and education, are no longer deductible costs of doing business.
Newspapers devote a lot of editorial space to advocating the passage or defeat of legislation. In fact, that is one of the vital functions newspapers have always played, and must continue to play, if our democratic form of government is to survive. Yet, under the new definition of lobbying, if 5 percent of The Record’s editorial space for the year is devoted to either supporting or opposing legislation, then the cost of salary and support services for the editorial writers, perhaps even the percentage of newsprint and ink devoted to the editorial page, will no longer be deductible. In other words, the IRS will treat those costs as profit, rather than the expenses they really are.
What about all those foreign lobbyists, the ones who have caused so much of the concern about regulating lobbying in the first place? Amazingly enough, they get away scot-free, because they work for foreign governments or corporations that don’t pay U.S. income taxes. As it turns out, it is our domestic industries, the ones who most need to go to Washington and Albany to fight for fair treatment, who have been penalized.
Why, you might ask, are there lobbyists in the first place? It’s because in a society as large and complex as ours, it is impossible for legislators to know about everything. Lobbyists analyze proposed laws and show where unintended problems might occur. Quite often, the information they provide to legislators saves a lot of money which would ultimately come out of the pockets of consumers.
This is the first time that the Internal Revenue Code has been used to try and advance a political policy. The original idea may have been well-intentioned, but in practice it has turned out to be the legislative equivalent of a drive-by shooting - innocent bystanders were wounded while the actual targets ducked out of the way.
Lobbyists can be regulated without resort to radical changes in the Internal Revenue code. They should be made to register, so that everyone has an opportunity to know who they represent, how much they are being paid and how much money is being spent. But using the Internal Revenue code is the wrong way to go about it. New York state already has an effective registration system already in place, and it has proven able to regulate lobbyists without going after newspapers. Perhaps the federal government should look at New York as a model.
