“LAWRENCE — Three professors at the University of Kansas have found that a one-time tax break allowed several multinational corporations to receive a 22,000 percent return on lobbying expenditures.
The study was conducted by Raquel Meyer Alexander, assistant professor of accounting; Stephen Mazza, associate dean of the School of Law; and Susan Scholz, associate professor of accounting and Harper Faculty Fellow. Mazza recently presented their findings at the Critical Tax Theory Conference, sponsored by the Indiana University Maurer School of Law in Bloomington.
A recent law change provided a tax break to the corporations by lowering their tax rate 85 percent on certain worldwide income. The professors examined the extensive lobbying around the law change and found that for each dollar spent on lobbying, a corporation received $220 in U.S. income tax savings.
The American Jobs Creation Act, among other provisions, allowed U.S. multinational corporations a one-time opportunity to bring home foreign earnings at an extremely low tax rate. In effect, it lowered the corporate income tax rate from 35 percent to a maximum of 5.25 percent on repatriated amounts. In response, 843 firms repatriated more than $312 billion at this reduced tax rate. Using financial disclosures in the annual reports of multinational corporations, the researchers examined 476 firms that repatriated more than $298 billion…”