In the News
Why do firms lobby? A 22,000 percent return
Publication date: April 10, 2009
Source: Christian Science Monitor
Author: Laurent Belsie
The Christian Science Monitor quoted Stephen Mazza, professor of law and associate dean for academic affairs, in a story about a study that Mazza conducted with two other University of Kansas professors. The study showed that a temporary tax break helped multinational corporations receive a 22,000 percent return on their lobbying expenditures.
The Monitor wrote:
Companies that spent more than $1 million on tax lobbying did even better: a 24,300 percent return, the researchers found. For example: In its disclosure statements, drugmaker Eli Lilly & Co. acknowledged spending $8.52 million in 2003 and 2004 to lobby for the tax break. It reaped more than $2 billion in return.
"It's a sign when a corporation's most profitable enterprise is lobbying," said Stephen Mazza, a law professor at the University of Kansas and coauthor of the study with colleagues Raquel Meyer Alexander and Susan Scholz.
That return sounds huge, but actually nobody knows if it’s the norm or not because it's usually impossible to estimate the direct benefit of lobbying, Mr. Mazza said. The American Jobs Creation Act was an exception. If anything, the estimated return is conservative, he added, because it included all the tax-related lobbying corporations did during that period, not just what they spent on the 2004 act.
