Saturday, April 11, 2009
Crime doesn’t pay, but lobbying sure does. Researchers at the University of Kansas (KU) reviewed expenditures from 2003-2004 when big business blew more than $280 million on lobbyists to convince Congress to pass a one-time tax holiday that lowered the rate companies had to pay for profits earned outside the United States. For that investment in lobbying the 93 businesses examined for the KU study reaped a 22,000% return. That’s right, 22,000. In pure dollars, the companies—including Pfizer, Merck & Co., IBM, Hewlett Packard, and Johnson & Johnson—saved $62.5 billion from the tax-holiday.
The rate of return was nothing, however, when compared to what banks and other members of the financial industry gained when they poured $114 million into lobbying and campaign donations last year to get Congress to adopt the Wall Street bailout. This time, the return was 258,449%, based on a study by the Center for Responsive Politics.
Given the fantastic returns businesses and interest groups get from hiring lobbyists, it’s no wonder that they ponied up $3.42 billion in total to lobby Congress in 2008, which represented a 14% jump from 2007, according to the Center.
-Noel Brinkerhoff
The Influence Game: Firms reap seeds of lobbying (by Julie Hirschfeld Davis, Associated Press)
KU Professors Found Companies Realized Big Tax Savings by Spending for Lobbyists (by Dave Helling, Kansas City Star)
TARP Recipients Paid Out $114 Million for Politicking Last Year (Center for Responsive Politics)
Measuring Rates of Return for Lobbying Expenditures (by Raquel Alexander, Susan Scholz and Atephen Mazza, University of Kansas)
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