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The article presents a study which focused on the tax benefits obtained from lobbying in the U.S. Although lobbying dominates corporate political spending, there are few comprehensive studies of the benefits accrued. While the level of a company's effective tax rate in one year does not compel it to lobby in the next, companies that marginally increase their lobbying efforts pay lower effective tax rates in the next year.

Lobbying dominates corporate political spending, but comprehensive studies of the benefitsaccrued are scarce. Using a dataset of all US firms with publicly available financial statements,we delve into the tax benefits obtained from lobbying. Although the level of a firm's effectivetax rate does not compel it to lobby, the more a firm spends on lobbying the lower the effectivetax rate it pays. Increasing registered lobbying expenditures by 1% appears to lower effectivetax rates by somewhere in the range of 0.5 to 1.6 percentage points for the average firm thatlobbies. While individual firms amass considerable benefits, the costs of lobbying-induced taxbreaks appear modest for the government. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]