American Journal of Political Science, Vol. 53, Issue 4. p. 893-909
37 Pages Posted: 10 Jan 2008 Last revised: 10 Dec 2011
Date Written: October 22, 2008
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: 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