Corporate Political Spending and State Tax Policy: Evidence from Citizens United

46 Pages Posted: 27 Apr 2022 Last revised: 2 Mar 2023

See all articles by Cailin Slattery

Cailin Slattery

University of California, Berkeley

Alisa Tazhitdinova

University of California, Santa Barbara (UCSB)

Sarah Robinson

Claremont McKenna College

Multiple version iconThere are 2 versions of this paper

Date Written: April 13, 2022

Abstract

To what extent is U.S. state tax policy affected by corporate political contributions? The 2010 Supreme Court Citizens United v. Federal Election Commission ruling provides an exogenous shock to corporate campaign spending, allowing corporations to spend on elections in 23 states which previously had spending bans. Ten years after the ruling and for a wide range of outcomes, we are not able to identify statistically significant effects of corporate independent expenditures on state tax policy, including tax rates, discretionary tax breaks, and tax revenues. Our results allow for a moderate economic effect on corporate tax rates and revenues, but suggest economically insignificant effects for other tax outcomes of interest to firms and their owners. A complementary analysis of the original introduction of the spending bans supports our finding that corporate spending has modest, if any, effects on tax policy.

Keywords: campaign finance, political contributions, Citizens United, independent spending, state taxes, state revenues, state expenditures

JEL Classification: D72, H20, H71

Suggested Citation

Slattery, Cailin and Tazhitdinova, Alisa and Robinson, Sarah, Corporate Political Spending and State Tax Policy: Evidence from Citizens United (April 13, 2022). Available at SSRN: https://ssrn.com/abstract=4083336 or http://dx.doi.org/10.2139/ssrn.4083336

Cailin Slattery

University of California, Berkeley ( email )

Berkeley
United States

Alisa Tazhitdinova (Contact Author)

University of California, Santa Barbara (UCSB) ( email )

South Hall 5504
Santa Barbara, CA 93106
United States

Sarah Robinson

Claremont McKenna College ( email )

Claremont, CA 91711
United States

HOME PAGE: http://www.s-robinson.com

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