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Study Shows Companies Got 22,000 Percent Return on Lobbying Investment!

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posted on Jan, 6 2012 @ 07:54 PM

A recent study took a look at the 2004 repatriation act, which allowed companies to bring overseas profits back into the country at a fraction of the standard tax rate, and found a whopping 22,000 percent return on investment. That makes sense considering that temporarily dropping the tax rate from 35 percent to 5 percent can save a company billions of dollars. But it's also incredibly unusual that legislation has such an outsized impact on so many bottom lines.

In 2004, economists found a bill so simple, so lucrative, that they could finally track the return on lobbying investment.

The American Jobs Creation Act benefited hundreds of multinational corporations with a huge, one-time tax break. Without the law, companies that brought profits earned abroad back to the U.S. had to pay a tax rate of 35 percent. With the law, that rate dropped to just over 5 percent. It saved those companies billions of dollars.

In a recent study, researchers Raquel Alexander and Susan Scholz calculated the total amount the corporations saved from the lower tax rate. They compared the taxes saved to the amount the firms spent lobbying for the law. Their research showed the return on lobbying for those multinational corporations was 22,000 percent. That means for every dollar spent on lobbying, the companies got $220 in tax benefits.

A corporation gives a "generous" donation to politician's campaign either directly or indirectly. In turn the politician will vote in favor of corporate interests.

Quite simply, these are legal bribes that circumvent the political process and should be against the law. In my opinion, the act of lobbying politicians is one of the biggest problems with our system. This is one area, along with insider trading that should be regulated.

posted on Jan, 6 2012 @ 08:02 PM
I have always loved the English Language!

Lobbying by definition means one thing yet when it comes to politics it takes on an entirely different meaning. And that is "Bribery"


The online dictionary almost has it right...almost.

v. lob·bied, lob·by·ing, lob·bies
To try to influence the thinking of legislators or other public officials for or against a specific cause: lobbying for stronger environmental safeguards; lobbied against the proliferation of nuclear arms.
1. To try to influence public officials on behalf of or against (proposed legislation, for example): lobbied the bill through Congress; lobbied the bill to a negative vote.
2. To try to influence (an official) to take a desired action.


edit on 6-1-2012 by jude11 because: (no reason given)

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