Those Legislating Lobbyists

If every California taxpayer could take advantage of the expertise of Chris Micheli, the state would be begging with a tin cup and a performing monkey to balance its budget.

Micheli, a stranger to at least 99.9% of Californians, is among the elite lobbyists who have the state’s corporate tax code down cold, able to bend open a potential loophole for loyal clients. His name came up repeatedly in a report this week by The Times’ Evan Halper on bills submitted in the Legislature to give hefty tax breaks to individuals or companies.

One of the bills would hand a whopping refund to Peter Ackerman, who by most accounts made hundreds of millions during financier Michael Milken’s junk-bond glory days. He was forced to give up $73 million of his fortune to settle a lawsuit, and he wants the state to return $5 million in taxes he paid on that money. State analysts say the only person they found who would benefit from the bill is Ackerman.

State Sen. Bob Dutton (R-Rancho Cucamonga), who took up the bill as vice chairman of the Revenue and Taxation Committee, ought to poke his head out the Capitol door and ask some taxpayers what they think of it.

Micheli was cited in two similar cases. One bill seemingly is for the benefit of billionaire Microsoft co-founder Paul G. Allen. Another aids a Central Valley container firm.

We don’t fault Micheli and others in Sacramento and Washington who do such expert work. We blame the lawmakers who pass their bills. One result of the state’s term-limits law is that lobbyists are far more expert than any lawmaker in narrow areas of legislation. No one is in the Assembly or state Senate long enough to acquire real fiscal expertise. Lawmakers who know they’ll be booted out after two or three terms have no good reason to spend months on such study.

The result is that the lobbyists bring in suggested language for laws, along with a persuasive, if self-serving, argument about justice and what’s good for business (or unions, or schools). The arguments are often supplemented by campaign contributions from the lobbyist’s client to the legislator most in a position to help. The lobbyist’s language may be slapped into a bill unstudied.

People are easily outraged at these bills. They’re easy to grasp, and most of us have a good idea what we could do with $5 million. Much worse shenanigans feel more abstract when they run into the billions.

For instance, the pharmaceutical industry is getting a big tax break on up to $75 billion of profits brought back from overseas, as minutely detailed in the New York Times on Sunday. The tale is complicated and full of exotic fiscal tricks seemingly aimed at moving and then repatriating U.S.-earned profits. At bottom, it’s much seamier than a Milken buddy demanding $5 million in taxes back. But the payouts come from the same pocket: yours. Or in the case of the federal tax breaks that increase public debt, your children’s.