Tax Lobbying and Corporate Political Activity: How Do Firms Seek Tax Relief?

Abstract

Corporate lobbying is an important and growing component of firms’ corporate political activity. According to recent reports, 2,220 organizations spent $773 million on 6,500 tax lobbyists in the 2011-2012 Congress with the number of tax lobbyists predicted to grow 30 percent by 2014 (Byrnes 2013). While a growing number of academic studies explore outcomes of tax lobbying (e.g., Alexander et al. 2009), little is known about how lobbying is actually performed. The purpose of this study is to describe the lobbying processes that occur at the legislative and administrative branches of the federal government. To accomplish this, we conducted a series of semi-structured interviews with lobbyists representing corporations and trade associations, as well as current and former staff members of the House Ways and Means Committee, Senate Finance Committee and the Joint Committee on Taxation. We provide context for our findings by categorizing the tax literature related to corporate political activity and identifying open research questions and also referencing lobbying data sources available to academic researchers interested in this field. This study contributes to a more complete understanding of the tax lobbying process and as such, provides the basis for researchers to identify more relevant research questions. Further, this study may provide educators a more robust understanding of the tax legislative process to facilitate classroom discussion of this important topic.

Keywords: Taxation, Lobbying, Corporate Political Activity

JEL Classification: H25, H32