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Corporate Political Contributions as Tax Break

By Matthew Yglesias on March 24, 2010 at 5:28 pm

"Corporate Political Contributions as Tax Break"

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Erica Greider’s writeup of the first post-Citizens United dive into the world of campaign spending illustrates to me an angle I hadn’t seen before:

Meanwhile, the Texas Tribune reports that it found a corporate-funded ad in a couple of small east Texas papers—the first corporate ad in Texas. There’s no attempt to hide the funding source—the ad takes the form of a letter signed, “Sincerely, KDR Development, inc.” But interestingly, the buy in this case seems to have been a personal affair. The president of KDR Development, which bought the ad, had previously run against the incumbent state representative and lost. Also, he thinks the incumbent (a recent D-to-R switcheroo) isn’t conservative enough for small business. So why pay for the ad through his company rather than through himself, the Trib asked? “You take the money out of the pocket that’s got some money in there,” he said.

If nothing else, this suggests that Citizens United is going to be a significant tax break for politically active smallish business owners. If you used to be a guy who shelled out $10,000 a year on political contributions, then you used to need to pay yourself substantially more than that in nominal salary, then pay taxes on the money, and then hand out the ten grand. Now if you own the business, you can have the company pay and then instead of it being income on which you pay tax, it becomes an expense for the business.

This kind of affect would have a strong partisan valence, as owners and proprietors are the most Republican occupational group in America by a wide margin.

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