The ten Fortune 100 companies that lobbied on 50 or more bills since 2008 paid an average effective tax rate of 17.1 percent in 2010; the ten companies that lobbied on between 25 and 49 bills paid an average effective tax rate of 18.0 percent; the remaining publicly-traded companies paid an average effective tax rate of 26.0 percent. The companies that lobbied on the most tax bills also have seen their tax rates decline the most since 2007.
To recap: Your typical Fortune 100 company pays around 26 percent in corporate tax. The handful of firms that have lobbied most heavily on tax issues since 2008 pay quite a bit less, 17.1 percent, on average. (Some hyperactive firms, such as GE, manage to pay less still.) All told, the researchers found that, since 2008, every additional tax bill a company lobbied over was associated with a 0.13 to 0.36 percentage point reduction in their 2010 tax bill.
As always, that’s not proof of a causal link (although does anyone have a more likely explanation?). And lobbying disclosure records are fairly imperfect. What’s more, there are a few outlying companies that buck the trend, such as ExxonMobil, one of the heaviest-lobbying firms that still pays high taxes, likely because oil producers tend to garner special scorn and attention in Congress. Still, Sunlight’s results are, at the very least, eyebrow-raising. And they jibe with earlier research that found that the more a company spends on lobbying, the less corporate tax it pays.
Note also that, as I discussed in an earlier post, economists have found that corporate lobbying is a remarkably exclusive club, with only a relatively small handful of firms actually arm-twisting lawmakers at any given time. The barriers to entry appear to be quite high — not just anyone can saunter on down to Capitol Hill and campaign for lower taxes.
Related: Steve Pearlstein discusses ways to reform the corporate tax code.