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Health & Fitness

30 of America's Largest Corporations Spent More Money Lobbying Congress Than They Paid in Taxes

The rich get richer, and the poor get poorer. Ain't they got fun!

A report recently issued by Public Campaign demonstrates just how important it is for Americans to battle corporate special interests and reclaim our democracy. The group’s research finds that thirty big corporations actually spent more money lobbying the federal government between 2008 and 2010 than they spent in taxes. For example, General Electric — one of the top 10 most profitable companies in the world — got a net tax rebate of $4.7 billion during this period. Meanwhile, it spent $84 million lobbying the federal government.

GE was not alone. All of these companies were profitable and all (except one) got tax rebates during this period.

Think that lobbying doesn’t work?

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Recent studies have shown that money spent on lobbying has an enormous payback. For instance:

  • Tax Benefits: Research shows that, in expectation for every $1 a firm spends to lobby for targeted tax benefits, the benefit is between 6x and 21x.
  •  Improved Cash Flows: On average, and controlling for other factors, firms that engaged in lobbying received more generous depreciation treatment.
  • Increased Market Value: Another study demonstrates that firms which lobby 'significantly outperform non-lobbying firms with respect to increased market value of equity'. This can be as high as adding another 2% per year to returns.
  • Protection: One analysis found that "compared to non-lobbying firms, firms that lobby, on average, have a significantly lower hazard rate of being detected for fraud, evade fraud detection 117 days longer, and are 38% less likely to be detected by regulators."

 

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While all the GOP presidential candidates have spoken eloquently about small businesses, entrepreneurs, and start-ups -- these are exactly the persons/entities least likely to be able to afford access to Gingrich et al.

The Securities Industry and Financial Markets Association (SIFMA) reported that its member firms collectively lost pre-tax $34 billion in 2008 (an amount equal to the prior 2 years' profits). Despite massive and unprecedented losses, the financial industry did not reduce its expenditures on lobbying and campaign contributions. Instead, it increased lobbying and campaign spending by about 40% over the prior presidential cycle -- from $690 million in 2004, to $956 million in 2008.

This investment in political advocacy appears to have paid off handsomely! In 2008-2009, the Federal government made up to $7 trillion available to support America's banks -- and on such generous terms -- that the banking industry's 2009 recorded profits were double those of its best prior year. All while many American small businesses (unable to afford such generous campaign contributions to their elected officials) suffered record losses/layoffs.

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