In 1975 only 175 corporations had lobbyists, but by 1982 nearly 2500 companies did. PoliticalAction Committees (PACS) increased from 300 in 1976 to 12000 in 1985. The big businessesbegan to mobilize their pool of resources to affect their taxes, regulations, the middle classAmericans, as well as the wealthy. By 2011 there were 12,929 lobbyists dispensing $3.
5 billionper year on lobbying. A report showed that the top 200 lobbying organizations from 2007 to2012 spent a combined $5.8 billion on federal lobbying and campaign contributions. Thisresulted in $13 trillion in federal business and $3.2 trillion in federal support. Federal business isdefined as company business facilitated by the federal government such as federal contracts andforeign sales through the Export-Import bank. Federal support for business includes Loans, loanguarantees, grants, and the “bailout” money that saved the big banks. So for an investment of$5.
8 billion, the top 200 corporations received $4.5 trillion and paid an average of 19% corporatetaxes. In addition very few of these organizations payed the federal rate of corporate taxes of35%.The total of lobbying, contributions and effective tax rates for three groups are shown asfollows: 200 $597 M $5.
2 B $1.3 trillion $3.2 trillion 19%. There were 68 manufacturers in thelist of the 200 corporations. These corporations invested $196 million in contributions and $2.
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2billion in lobbying. They received $862 billion in federal contracts and $43 billion in federalsupport. A good example is the Whirlpool Corporation, who spent $1.8 million over 2 years toget themselves lucrative energy tax credits. Many other manufacturers are making their productsmore energy efficient, but Whirlpool lobbying gained them $120 million in tax credits.
This hada dramatic effect on their bottom line where the total of Federal State and foreign taxes paid werenegative $61 million in 2009, negative $64 million in 2010, and negative $436 million in 2011. The large corporations have the advantage of using the tax code based on 43 tax credits,deferrals, and exemptions. For the most part these credits and exemptions aren’t available tosmall and midsize businesses. Who cannot afford to hire Washington D.C. lobbyists.
From 2008to 2010, according to Forbes Magazine, 29 corporations paid no federal taxes on their combinedprofits of $164 billion. During this 3 year period, they also spent $476 million on lobbying whichgained them $11 billion in total tax rebates. The big corporations used Congress and thedemocratic processes to get their way and achieve their financial goals. After examining 49 financial corporations it showed that for an investment ofapproximately $1 billion in contributions and lobbying the sector received $157 billion in federalbusiness and $2.
5 trillion in federal support. Most of the federal support money was bailoutmoney from when the corporations got into serious financial trouble. After the financial crash of2008 and during the subsequent Dodd/Frank legislation designed to try and regulate Wall Street,there were more than 2000 lobbyists in the halls of Congress during 2010. In just the periodApril through June of 2010 the financial special interests spent $126 million on lobbying thefinancial reform bill.
Lobbying is about a $3.3 billion per year industry with around 12,000lobbyists. Lobbyists earn from $300,000 to $1,000,000 per year so it takes a fairly largeorganization to hire them. An article in Quartz entitled how big business buys the right to dodgeUS taxes says, “Congress doesn’t fill the tax laws with loopholes on a whim or even on accident– it does so because companies and their lobbyists spend millions of dollars influencinglegislators to write and maintain a tax code that suits them”. A good example of how lobbyingworks on specific issues is the American Legislative Exchange Council. ALEC brings statelegislators together with the country’s largest corporations—including Wal-Mart Stores Inc.
, The Coca-Cola Company, FedEx, Amway, Exxon Mobil Corp., Koch Industries Inc., and leadingtobacco and pharmaceutical firms.
ALEC’s 2,000 member legislators include a large share of thecountry’s state senate presidents and house speakers. Legislators are invited toconferences—often at posh resorts—where committees composed of equal numbers of publicand private officials draft proposals for model legislation. Over the past decade, ALEC’s leadingcorporate backers have contributed more than $370 million to state elections, and over 100 lawsa year based on ALEC’s model bills have been adopted. Clearly lobbying has had a profoundimpact on businesses in America.
Corporations are willing to dish out billions of dollars toreceive tax breaks and federal support greatly exceeding the money they invested in lobbying.This has negatively affected the middle class whom have had to pick up the slack and make upfor the low taxes and bailouts given to the larger corporations
