(WASHINGTON) — The eight companies that spent the most on lobbying happened to have a lower corporate tax rate, according to a report released this week from the Sunlight Foundation.
The watchdog group, which advocates for government transparency, analyzed the 200 largest U.S. companies, ranked by 2010 pre-tax income, and found those that spent the most on lobbying between 2007 and 2009 had lower 2010 tax rates than what they paid in 2007. Some of the companies say their tax rates have little to do with their lobbying efforts though.
The average corporate tax rate fell, after all, to 29.3 percent in 2010, compared to 29.9 percent in 2007, a period that included many companies struggling to recover during the financial crisis.
Lee Drutman, senior fellow at the Sunlight Foundation, acknowledged that the lower tax rates are not entirely driven by lobbying, but the “correlation is strong.” Drutman analyzed the reported tax rates described in company financial statements.
“Certainly, there are a variety of reasons why corporations pay the taxes that they do from year to year, some of which are no doubt idiosyncratic. But for this pattern to occur entirely by chance is statistically unlikely, though possible,” he said. “These corporations all report substantial lobbying on tax issues, and if it’s having no effect on their effective tax rates, then they might wish to explain to their shareholders why they are wasting their money.”
Here’s the list of the companies that paid the most in lobbying from 2007 to 2009, based on data from the Senate’s Office of Public Records, and the change in their tax rates in 2010, according to the Sunlight Foundation:
Lobbying: $81.92 million
Estimated tax reduction: -$565.32 million
2. Verizon Communications
Lobbying: $77.58 million
Estimated tax reduction: -$1,005.51 million
3. General Electric
Lobbying: $73.17 million
Estimated tax reduction: -$1,082.70 million
Lobbying: $70.96 million
Estimated tax reduction: -$7,359.95 million
Lobbying: $63.31 million
Estimated tax reduction: -$160.66 million
Lobbying: $58.33 million
Estimated tax reduction: -$377.16 million
7. Northrop Grumman
Lobbying: $57.56 million
Estimated tax reduction: -$296.08 million
Lobbying: $56.99 million
Estimated tax reduction: -$321.5 million
Copyright 2012 ABC News Radio
Brian Stelter, CNN Money
Jeff Wuorio, Deseret News