Lobbying for Tax Loopholes
Tax day is coming for most Americans, but if you’re a well-connected corporation that spent nearly a million dollars lobbying Congress last year, April 15th is just another day. Whirlpool Corporation, which had global sales of $18 billion and turned a $619 million profit in 2010, likely won’t pay a dime of corporate income tax this year… or for years to come, thanks in large part to an expensive lobbying blitz.
In 2005, Congress passed H.R. 6, the “Energy Policy Act,” allowing corporations to claim tax credits for building energy-efficient appliances. Under that law, Whirlpool has collected more than $500 million in credits, as Bloomberg News first reported (subscription required). Yet with the tax credits slated to expire, the company unleashed a full court press effort.
Whirlpool spent $940,000 lobbying in 2010 on issues including energy tax credits. This is more than triple what the company spent in 2007. In addition, a quarter of Whirlpool’s total lobbying tab, $240,000, was paid directly to Capitol Tax Partners, a firm that, like the name implies, focuses on tax policy issues. General Electric, which has reportedly collected about $200 million worth of tax credits, also increased its lobbying spending to almost $40 million in 2010. Coincidently or not, H.R. 4853, the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” passed Congress on December 17, 2010 - and extended the energy tax credits through 2011.
Whirlpool alone is expected to claim $300 million in additional tax credits in 2011, an amount equal to about one-third of the company's projected 2011 earnings. As the Wall Street Journal points out,
“Those credits can be carried over from one year to the next for up to 20 years. Whirlpool is collecting so many credits that it may not have to pay a dime of corporate income tax for years.” That is quite a return on their million dollar lobbying investment.
The company also invested in politicians. Its’ PAC spent $82,000 during the 2010 election cycle, nearly double what it spent in the prior midterm election. Senate Majority Leader Harry Reid (D-NV) was the top recipient of contributions, followed by former Sen. Blanche Lincoln (D-AR) who served on the Senate Committee on Finance. Reps. Dave Camp (R-MI) and Sander Levin (D-MI), Chairman and Ranking Member of the House Committee on Ways and Means, respectively, were the top two House recipients of Whirlpool PAC cash during the 2010 election cycle, and co-sponsors of the 2010 bill. Undoubtedly, further smoothing the ask, Whirlpool is based in Michigan.
This tax credit expires at the end of the year, so Whirlpool is likely to continue investing in the political process. Given the incredible rate of return, it is money well spent.