Thirty Fortune 500 Companies Paid More to Lobby Congress Than They Did in Federal Income Taxes, PIRGIM Study Shows

PIRGIM

DETROIT – With the second anniversary approaching of the Supreme Court’s decision in the Citizens United case – which opened the floodgates to corporate spending on elections – PIRGIM, with allies from the Michigan Campaign Finance Network, revealed 30 corporations that spent more to lobby Congress than they did in taxes—including three companies headquartered in Michigan. The groups released the information in front of the DTE Energy complex in downtown Detroit. 

The report, Representation without Taxation: Fortune 500 Companies that Spend Big on Lobbying and Avoid Taxes was written in collaboration with Citizens for Tax Justice, and takes a close look at one area where corporate power and influence is on full display: corporate tax policy. By exploiting loopholes and special provisions in the tax code, 280 consistently profitable Fortune 500 companies paid about half the statutory corporate tax rate while spending $2 billion to lobby Congress on tax policy and other issues. The report also looks at the “Dirty Thirty” particularly aggressive tax avoiders that spent more on federal lobbying than income taxes between 2008 and 2010. Twenty-nine of these corporations actually received a net tax rebate during the three year period of the study. These include Michigan-based corporations Con-Way, CMS Energy, and DTE Energy.

“The fact that so many corporations can spend more money lobbying than they pay in taxes makes a mockery of our tax code and our democracy,” said PIRGIM program associate Meghan Hess.

The report takes a deeper look at one of the most egregious ways corporations skirt taxes – by shifting profits legitimately earned in America to offshore tax havens, where they are subject to little, if any taxes. At least 22 of the 30 companies studied had subsidiaries in tax haven countries. 

“Corporations should not be able to shirk their tax burden by using gimmicks to game the tax code,” said Hess.  “When corporations don’t pay, ordinary taxpayers and responsible small businesses are left to pick up the tab.”

The “Dirty Thirty” companies all told made $163.7 billion in profits while paying zero dollars in federal income taxes and collecting a total of $10.6 billion in various tax rebates. Meanwhile, they collectively spent $475.7 million in lobbying expenses for the three year period.

U.S. Congressman John Conyers (MI-14) offered commentary on the event. “The Supreme Court’s Citizens United decision has opened the floodgates for unlimited, anonymous corporate money to distort and undermine our democracy,” he said in a written statement. “By wiping out a century of legal precedent, the Supreme Court has given giant corporations the same free speech rights as real people.  To ultimately address this dangerous decision, I, along with my colleagues, introduced a narrowly crafted constitutional amendment, H. Res. 78, to overturn Citizens United.  But in the meantime, Congress must immediately pass disclosure legislation similar to H.R. 5175—the DISCLOSE Act, which passed the House last Congress, so that voters can know who really stands behind these anonymous ads flooding the airwaves.  Nothing less than our right to free and fair elections is at stake.”

Rich Robinson, executive director of the Michigan Campaign Finance Network, pointed out the difficulty in tracing the source of special interest spending in elections, on both the federal and state level. “While the amount of money spent on elections is growing rapidly, the percentage of that spending that is traceable to its true source is shrinking. The 2010 gubernatorial general election, state supreme court election, and secretary of state election are three examples where there was more undisclosed spending than that which was disclosed,” he said.

“Campaign contributions and highly-paid lobbyists give corporate executives a louder voice than the millions of working families who wonder why they pay more in taxes than GE, Boeing, Wells Fargo, Verizon, and dozens of other huge, profitable corporations, all put together,” said Hess.

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PIRGIM, the Public Interest Research Group in Michigan, is a statewide non-profit, non-partisan public interest advocacy organization.

www.pirgim.org