A career Democratic operative is pushing GOP lawmakers to oppose a pending trade bill on the grounds that it violates a pledge to oppose tax increases, but the group behind the pledge says it does no such thing.
Curtis Ellis is a long-time Democratic communications aide who runs ObamaTrade.com, a project of the American Jobs Alliance. The site promotes conservative opposition to the Trans-Pacific Partnership, but Ellis is a self-described progressive. A three-time Democratic congressional candidate funds the site.
Ellis on Monday criticized Republican TPP supporters for violating Americans for Tax Reform’s no-tax pledge due to a provision that raises penalties for businesses that fail to file 1099 tax forms from $30 to $50.
"This is clearly a tax increase—and it’s a violation of [ATR president] Grover Norquist’s no tax increase pledge that most of these Congressmen signed," Ellis said.
Sen. Rand Paul (R., Ky.) later cited that analysis as a reason that Republicans should oppose protections for American workers seen as crucial to TPP’s eventual passage.
House Republican leaders are hoping to use the 1099 provision to help offset the cost of Trade Adjustment Assistance, as the protections are known. The House voted down a TAA measure on Friday, but congressional Republicans are looking to reconsider the measure.
Ellis and other TPP critics say the 1099 provision is a de facto tax increase and therefore a violation of ATR’s pledge, a claim ATR disputes.
"This assertion is factually inaccurate," according to Ryan Ellis (no relation to Curtis), the group’s tax policy director. "This is a fine for failing to comply with tax law, not a tax increase."
"The claim that increasing penalties for not complying with tax law is a tax increase doesn't hold water," Ellis wrote in a Monday blog post. "Tax increases happen when tax law itself changes to result in higher taxes being owed by families and businesses."
Sen. Paul and Rep. Ken Buck (R., Colo.), a TPP opponent, compare TAA’s 1099 language to a since-repealed provision in Obamacare that dramatically expanded the number of transactions that businesses had to report on 1099 forms.
"This is similar to the fines they wanted to do in Obamacare with 1099s and there was such an outcry it’s the only part of Obamacare we ever repealed," Paul told Breitbart News.
ATR’s Ellis says the two provisions are categorically different. Increasing penalties for violations of federal tax laws is not the same as increasing the number of businesses or transactions that are subject to those laws, he says.
The TPP language "is intended to police bad actors in tax compliance, not ordinary businesses. There are already provisions in the penalty for holding small firms harmless, and this is not changed by this language."
"The paid consultant putting this out is a lifetime liberal/progressive who is pretending to be a conservative for the purposes of scuttling free trade," Ellis wrote.
Curtis Ellis was described as "a conservative activist and not a liberal Democrat" in the Monday article.
However, Ellis has described himself as a progressive Democrat. He has written for liberal sites such as Talking Points Memo and the Huffington Post. He previously hosted a radio show on the Progressive Radio Network branded as a project of the American Jobs Alliance, the group that publishes ObamaTrade.com.
He also worked as communications director for former Rep. Steve Kagen (D., Wis.), a critic of ATR’s tax pledge. Ellis has called efforts to reduce corporate tax burdens "sociopathic behavior," and participated in numerous meetings and events organized by the left-wing Occupy Wall Street movement, which generally favored large corporate tax hikes.
"The source is not legitimate," Ryan Ellis said of Curtis Ellis’ tax analysis. "Conservatives should not have any tax-based objections to this package of trade legislation."
"The objections raised by people here have nothing to do with [TAA’s] specifics and everything to do with simply being anti-free trade," he charged. "They just back-rationalize their position on a daily basis."