Elizabeth Warren proposes new lobbying tax that would cost US mega-corporations hundreds of millions

Jonathan Ernst/Reuters

• Democratic presidential candidate Elizabeth Warren on Wednesday unveiled a plan designed to curb the influence of corporate lobbying.
• A key component of Warren’s plan is a new tax on what she refers to as “excessive lobbying,” which includes corporations and trade organizations that spend more than $500,000 per year trying to exert influence over government decisions. 
• Citing data from the Center for Responsive Politics, Warren said had the tax been in effect over the last 10 years it would have collected an estimated $10 billion in revenue. 
• Visit the Business Insider homepage for more stories.

Elizabeth Warren published a Medium post on Wednesday outlining a plan to tackle corporate lobbying in the US — and it could cost America’s biggest companies hundreds of millions of dollars. 

The democratic presidential candidate proposed a tax on what she calls “excessive lobbying,” or organizations including corporations and trade groups that spend more $500,000 per year on lobbying efforts. 

Here’s an overview of how the tax would work, according to Warren’s post: 

• Companies that spend between $500,000 and $1 million per year on lobbying would have to pay a 35% tax on their total lobbying expenditures.
• For every dollar above $1 million spent on lobbying, the rate would rise to 60%. 
• For every dollar above $5 million, the tax would climb to 75%. 

Citing data from the Center for Responsive Politics, Warren also added that if the tax had been in effect over the last 10 years, it would have generated an estimated $10 billion in revenue from more than 1,600 trade groups and corporations. 

Fifty-one organizations including the Koch Industries, Pfizer, Boeing, Microsoft, Walmart, and Exxon would have fallen into the 75% bracket for each one of those ten years, Warren said. 

More specifically, General Electric, Boeing, AT&T, Business Roundtable, and Comcast would have all paid between $105 million and $129 million under the tax. 

The U.S. Chamber of Commerce, a business lobbying group and the largest spender, would have paid out about $770 million in taxes on $1 billion in lobbying expenditures during the period. 

Read more: Morgan Stanley says WeWork’s failed IPO marks the end of an era for unprofitable unicorns — and explains why it leaves the market’s tech kingpins vulnerable

Under Warren’s proposal, the proceeds from the tax would go into a new Lobbying Defense Trust Fund that would focus on giving resources to Congress and federal agencies to “fight back” against lobbying. According to the post, more than $2.8 billion was spent on lobbying last year. 

The Lobbying Defense Trust Fund would allocate the money toward three initiatives, according to the plan: 

• Strengthening support agencies like the Congressional Budget Office, which provides economic and budget data to congress. 
• Providing money to federal agencies that are facing significant lobbing activity. 
• Proceeds will also help create a new Office of the Public Advocate to “help the American people engage with federal agencies and fight for the public interest in the rule-making process.”

“Corporate lobbyists are experts at killing widely popular policies behind closed doors,” Warren added. “My new lobbying tax will make hiring armies of lobbyists significantly more expensive for the largest corporate influencers.” 

Read more: Morgan Stanley breaks down how the next market downturn could upend what even the most prepared investors are expecting