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Lobbying and Taxes

American Journal of Political Science, Vol. 53, Issue 4. p. 893-909

37 Pages Posted: 10 Jan 2008 Last revised: 10 Dec 2011

Brian Kelleher Richter

University of Texas at Austin - Red McCombs School of Business

Krislert Samphantharak

University of California, San Diego - School of Global Policy and Strategy

Jeffrey F. Timmons

NYU Abu Dhabi

Date Written: October 22, 2008

Abstract

Lobbying dominates corporate political spending, but comprehensive studies of the benefits accrued are scarce. Using a dataset of all US 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.

Keywords: Lobbying, Taxes, Money in Politics, Corporate Political Activity, Political Economy

JEL Classification: D72, H22, H25, K34, M21

Suggested Citation

Richter, Brian Kelleher and Samphantharak, Krislert and Timmons, Jeffrey F., Lobbying and Taxes (October 22, 2008). American Journal of Political Science, Vol. 53, Issue 4. p. 893-909. Available at SSRN: https://ssrn.com/abstract=1082146 or http://dx.doi.org/10.2139/ssrn.1082146

Brian Kelleher Richter (Contact Author)

University of Texas at Austin - Red McCombs School of Business ( email )

2100 Speedway
B6500, CBA 5.250
Austin, TX 78712
United States
512-232-6751 (Phone)

HOME PAGE: http://briankrichter.com/

Krislert Samphantharak

University of California, San Diego - School of Global Policy and Strategy ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States
858-534-3939 (Fax)

Jeffrey F. Timmons

NYU Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates
(971) 262 84523 (Fax)

HOME PAGE: http://https://nyuad.nyu.edu/en/academics/faculty/jeffrey-timmons.html

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