Lobbying and Taxes |
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Authors: | Brian Kelleher Richter Krislert Samphantharak Jeffrey F Timmons |
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Institution: | University of California, Los Angeles; University of California, San Diego; Instituto Tecnológico Autónomo de México |
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Abstract: | Lobbying dominates corporate political spending, but comprehensive studies of the benefits accrued are scarce. Using a dataset of all U.S. firms with publicly available financial statements, we delve into the tax benefits obtained from lobbying. Firms that spend more on lobbying in a given year pay lower effective tax rates in the next year. Increasing registered lobbying expenditures by 1% appears to lower effective tax rates by somewhere in the range of 0.5 to 1.6 percentage points for the average firm that lobbies. While individual firms amass considerable benefits, the costs of lobbying-induced tax breaks appear modest for the government. |
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