Monday, March 14, 2011

Profitability of Lobbying

I've written before on the Supreme Court's decision in Citizens United to make political influence less restrained. However, my support for allowing more political donations doesn't mean I don't think the government shouldn't write better rules for the process. After all, good markets need good governments. Here's something I might limit, the revolving door of politics:
Washington’s “revolving door” – the movement from government service into the lobbying industry- is regarded as a major concern for policy-making. We study how ex-government staffers benefit from the personal connections acquired during their public service. Lobbyists with experience in the office of a US Senator suffer a 24% drop in generated revenue when that Senator leaves office.
Just how profitable is lobbying? Here's one example:
The report details efforts by hundreds of companies in 2003 and 2004 to push through a one-time tax "holiday" that lowered for a year the tax rate they paid on profits earned abroad. All told, U.S. companies saved about $100 billion in taxes, with pharmaceutical behemoths Pfizer and Merck & Co., technology giants IBM and Hewlett Packard, and health products maker Johnson & Johnson among the top beneficiaries. 
The study zeros in on 93 firms that spent as much as $282.7 million lobbying on the issue during that period, and ultimately saved a total of $62.5 billion through the tax change.
That a return of 22,000%!

No comments:

Post a Comment

You are the reason why I do not write privately. I would love to hear your thoughts, whether you agree or not.