Good corporate management
From the
Kansas City Star:
KU professors found companies realized big tax savings by spending for lobbyists
A 22,000 percent return on investment?
Three professors at the University of Kansas say dozens of America�s largest companies got that sweet deal four years ago � not by hiring workers or purchasing new equipment, but by investing in Washington lobbyists.
Those lobbyists, the three said, helped write a federal tax break that eventually put roughly $100 billion in tax savings in the pockets of the firms and their shareholders, at a cost to the companies of just pennies on the dollar.
Stephen Mazza, a professor at KU�s School of Law, and two associates spent six months examining the effects of one part of the American Jobs Creation Act, a major tax overhaul passed in October 2004. They looked at a provision that gave companies a one-year window to bring overseas earnings back into the U.S. at a 5.25 percent tax rate, rather than the usual 35 percent, as a jobs-creation incentive. The three professors then looked at how much such companies as IBM, Pfizer, and Eli Lilly and Co. spent lobbying for the break, and how much they saved when it passed.
The result? Ninety-three of the country�s biggest multinational firms pulled in tax savings of more than $62 billion � after spending just $283 million to lobby for the bill.
The study concluded that almost 500 companies got an average 22,000 percent return on their lobbying investments.
Talk about misappropriating a resource... The American Jobs Creation Act was created to jump-start creation of jobs here, the reduced take rate was there to allow for the cost of retooling and setting up the factories to manufacture those items that were, at that time, being manufactured overseas. Instead, these companies took advantage of the cut while having no intention of moving the operations back to the USA.
Why am I not surprised. And of course, we as consumers saw this reflected in the lower prices of those products.
Looks like a good case for tax violation and substantial fine...
Posted by DaveH at April 10, 2009 9:27 AM