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Corporate political spending and state tax policy: Evidence from Citizens United

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  • Slattery, Cailin
  • Tazhitdinova, Alisa
  • Robinson, Sarah

Abstract

To what extent is U.S. state tax policy affected by corporate political contributions? The 2010 Supreme Court Citizens United v. Federal Election Commission ruling provides an exogenous shock to corporate campaign spending, allowing corporations to spend on elections in 23 states which previously had spending bans. Ten years after the ruling and for a wide range of outcomes, we are not able to identify statistically significant effects of corporate independent expenditures on state tax policy, including tax rates, discretionary tax breaks, and tax revenues. Our results allow for a moderate economic effect on corporate tax rates and revenues, but suggest economically insignificant effects for other tax outcomes of interest to firms and their owners. A complementary analysis of the original introduction of the spending bans supports our finding that corporate spending has modest, if any, effects on tax policy.

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  • Slattery, Cailin & Tazhitdinova, Alisa & Robinson, Sarah, 2023. "Corporate political spending and state tax policy: Evidence from Citizens United," Journal of Public Economics, Elsevier, vol. 221(C).
    • Handle: RePEc:eee:pubeco:v:221:y:2023:i:c:s0047272723000415
    DOI: 10.1016/j.jpubeco.2023.104859
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    Cited by:

    1. Schnakenberg, Keith & Turner, Ian R, 2023. "Dark Money and Politician Learning," SocArXiv 3bzex, Center for Open Science.

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    More about this item

    Keywords

    Campaign finance; Political contributions; Citizens United; Independent spending; State taxes; State revenues; State expenditures;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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