Exploring Corporate Lobbying and Tax Behavior: Before and After the TCJA

This paper explores the relationship between corporate lobbying expenditures and tax rates in the years before and after the enactment of the Tax Cuts and Jobs Act (TCJA) in 2017, focusing on eight major industry sectors.Using datasets from the Institute on Taxation and Economic Policy (ITEP) and OpenSecrets, the study employs regression analyses and visualizations to explore sectoral and corporate behavior.A new variable measuring the percentage of the statutory tax rate paid was calculated for each company, allowing for nuanced insights into corporate tax compliance.Results show a negative correlation between lobbying expenditures and tax rates, with sectors such as Communications/Electronics and Energy/Natural Resources benefiting the most.However, statistical insignificance due to a limited sample size highlights key data constraints.These findings emphasize the inequitable outcomes of the TCJA and the outsized influence of lobbying, particularly in California's dominant industries, such as technology and energy.The study underscores the importance of policy interventions to address these disparities and calls for expanded datasets to confirm these trends.