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

Cailin Slattery, Alisa Tazhitdinova and Sarah Robinson

Journal of Public Economics, 2023, vol. 221, issue C

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.

Keywords: Campaign finance; Political contributions; Citizens United; Independent spending; State taxes; State revenues; State expenditures (search for similar items in EconPapers)
JEL-codes: D72 H20 H71 (search for similar items in EconPapers)
Date: 2023
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Working Paper: Corporate Political Spending and State Tax Policy: Evidence from Citizens United (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:221:y:2023:i:c:s0047272723000415

DOI: 10.1016/j.jpubeco.2023.104859

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