Looking for a 22,000 percent return on your investment? Hire a lobbyist, send her to Washington on your behalf, and watch the money roll in. A recent study out of the University of Kansas found that every $1 spent by firms lobbying Congress for a single tax break in 2004 brought in $220 in tax savings. (HT: Marginal Revolution) [%comments]
What’s Better: Stocks, Bonds, or Lobbyists?
TAGS: taxes
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On NPR’s Morning Edition this morning, one of the newscasters made a reference to “what the lobbyists [would] allow” in upcoming legislation in Congress. That just made my blood boil.
This is cherry-picked, though. Sure, you get an enormous return some of the time – 22,000 percent, in this case. Other times, not so much. A 1$ investment in the lottery is a great deal too, if you pick the right numbers.
I wonder if a 22,000% rate of return is sustainable? If there is such a great return shouldn’t other opposing forces enter the lobbying market thus reducing these super profits? It wouldnt even have to be companies, but if an NGO or a ’cause’ could obtain a similar return to combat the corporate actions we would see it increase the costs of influencing policy.
Unlike the lottery, with lobbyists, it’s always the right number
Jacques René Giguere
obviously the idea of lobbying for a just cause was lost somewhere along the way. If they had done what the bill had stated they were supposed to do, the tax break would have stimulated the economy, unfortunately, some of those companies decided to swindle us to bolster their bottom line and will now make it impossible for other companies to request to repatriate money and will thus use that money overseas instead of here in the US.
I think it is a gross understatement of the ROI. By the simple fact that more than 80% of the bills filed are not enacted, it is far easier to kill rather than create a law. The value to those who employ lobbyists is most often in the preservation of the status quo. And rarely does status quo result in advantage to the public. The Obama stealth move to try to knock the big birds off the internet service roost will soon be a case in point. Pretend compatition will win out over real competition, and especially over a much cheaper public utility model, with the help of lobbyists set to kill any change.
On the flip side, I had not considered the advertising costs for the shills on cable news, whose selfless service on behalf of their parent corporations persuades private citizens to believe and vote agtainst their own interests. May the ROI is not so high after all. Still too high, but money talks by speaking as “free” speech according to our Supreme Court.
Ahem…. BS!
The anecdote involved here is not about a ‘tax break’. Its about an agreement on how to tax repatriated profits. If such an agreement was never made, the profits would logically not have been repatriated. The companies did not “make” or “save” anything that wasn’t conditional to the premise of the statute.
If it took a compensated smart person (aka ‘lobbyist’) to broker this deal with the people’s representatives, good for them.
Further:
For those of you who would argue that lobbyists shouldn’t be needed – consider the AMT code. This tax is an illogical and indefensible punishment for an unpopular minority. As far as I can tell, it will never get changed until the upper middle class hire ourselves a lobbyist.
I do bemoan the death of common interest, but our democratic ethos has given way to (the proverbial) “two wolves and a sheep arguing about whats for dinner”.
NGOs, “good” charities, and Causes all lobby, and all lobby much more effectively than a corporation. Organizations like Michael J. Fox’s (to combat Parkinsons) or Susan B. Komen regularly go to Capital Hill to request money. The Cause may be “just” but what they do is still lobbying.
Think about where your money is spent next time you do a walk-a-thon. After the overhead is paid, the best way to spend that money is not to a research center, but to a K Street lobbyist. The lobbyist will get money from the government through taxes (in effect forcing people who did not donate to donate). The money will be spent on more event overhead and lobbying – perpetuating The Cause (and perpetuating problem The Cause was supposed to fix.)
Causes lobby. They lobby a lot. Let’s not pretend their actions are any better than that of, say, an airline company. Let’s not pretend that when Michael J. Fox lobbies Congress to write laws or fund certain projects, he is acting differently than a large pharmaceutical with an anonymous spokesman. He may not be doing to for money, but he’s doing exactly what the drug company is doing.