KU News – Tax lobbying provides 22,000 percent return to firms, KU researcher­s find

“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…­”