Can America Afford Corporate Lobbyists?
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- Election season is in full swing, with the Iowa caucuses completed, the New Hampshire primary on deck this week and South Carolina's primary coming up fast. The Republican contenders are running hard, and are all pushing variations on certain common themes: trimming federal spending, cutting taxes, and shrinking the nation's ballooning deficit, now estimated somewhere north of $15 trillion. It's a terrifying figure, and one that the new president -- whoever he may be -- will certainly have to address.
The nation's financial condition is a serious problem, and one that will ultimately affect every segment of the population. That's why it's a little concerning that none of the candidates appear to have yet picked up on a December 2011 report by Public Campaign, a self-described " non-profit, non-partisan organization dedicated to sweeping campaign reform that aims to dramatically reduce the role of big special interest money in American politics." Citing data from its non-profit peers Citizens for Tax Justice and the Center for Responsive Politics, Public Campaign demonstrates that some of the largest corporations in the United States have spent millions on lobbyists in the past three years and, in the process, managed to eliminate their tax liability or even receive tax rebates.
Public Campaign examined statistics for thirty big corporations in several industries: communications (Verizon); energy (General Electric, American Electric Power, Consolidated Edison and several others); financial services (Wells Fargo); shipping (FedEx); and manufacturing (Boeing, Mattel, Corning and others). Between them, those companies spent $476 million dollars over three years to lobby Congress or, as Public Campaign pointed out, approximately $400,000 every day, including weekends.The companies' lobbying undoubtedly focused on multiple issues, but it appears that tax avoidance must have been one of them. Twenty-nine of the 30 companies actually received tax rebates over the three years in question. For example, General Electric reportedly spent over $84 million on lobbying; its tax rate came in at -45% for the same period and the company reported received a tax rebate of nearly $5 million. Of the 30 companies studied, only FedEx paid taxes, and that at a measly 1% three-year rate, significantly less than the statutory rate of 35%.
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