Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Words matter, but lobbying dollars get the job done

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US Capitol building in Washington, DC. (Photo: Wikimedia Commons)

How some of the biggest companies have used their advocacy voice in response to the Trump agenda.

Over the last year there has been a lot of hubbub about how the private sector has stood up to some of President Trump’s harshest policy proposals. We wanted to know: have those public statements and stances made any headway with policymakers?

Today Oxfam released a new report, Dollars and Sense: Corporate Responsibility in the Trump Era, which compares how 70 US companies used their corporate voice publicly over the first year of the Trump administration. We read every public statement, scoured every publicly available corporate policy and dug into the lobbying disclosures of each of the top 10 companies across seven key sectors.

Our main finding calls into question whether corporate America has truly earned the praise it has received in some corners for speaking out against President Trump’s policies and rhetoric. We discovered that while many companies and their executives have unquestionably spoken out in very public ways in 2017, behind closed doors, they primarily used their lobbying power to push for lower taxes. In other words, when it comes to the responsible use of corporate power, less has changed in the era of Trump than meets the eye.

There is no doubt that today’s CEOs have more appetite to align their company’s public image with specific sides in some of the country’s most contested and polarized debates. On issues ranging from gay marriage to refugee rights, executives across industries have been pushed – or willingly walked – into the eye of the political storm. These companies deserve credit for speaking out and taking public action. But taking the mantle of leadership requires more than headline-seeking statements, and the data shows that social issues have taken a back seat when lobbying dollars were on the line.

In public, many of the companies issued support for addressing climate change, support for refugees, immigrants and DACA recipients, and support for greater diversity and inclusion. Some companies publicly admonished President Trump’s administration for its positions, such as pulling out of the Paris climate agreement, the president’s xenophobic comments and equivocation of white supremacists and protesters at Charlottesville, and the discriminatory Muslim ban. There is immense value in having companies publicly take a stand on these critical social justice issues. This takes courage, which we commend, particularly with a president who has been known to make such battles personal. At the same time, the voice of big business presents important challenges too. A more outspoken corporate landscape alongside what seems like an unending concentration of corporate power can be problematic. This is particularly true when civic space is closing in many countries and democratic governance is under threat.

But in 2017, companies knew how to use their power when they wanted to see policy action in Washington. And most companies spent little or no money to lobby Congress in support of advancing these social justice issues. Instead, they spent millions of dollars to push for lower taxes. Words matter, but actions – and lobbying dollars – still speak louder.

Oxfam’s analysis found that the 70 companies in our list collectively spent more than $280 million to lobby Congress on more than 3,000 issues in 2017. They reported lobbying on climate change 19 times; 138 times on diversity and inclusion and 552 times on tax. That translates into an estimated $1.5 million spent lobbying on climate, almost $11 million on diversity and inclusion issues, and almost $44 million to lobby on tax.

The upshot is that the US pulled out of the Paris Agreement, a Muslim travel ban still reigns, immigration reform and DACA have not moved in Congress; and yet a tax cut bill benefiting the rich and corporate America was passed with overwhelming support from Republican members of Congress and signed by the president.

The US business community lobbied hard to change how companies with overseas operations are taxed, and their efforts paid off enormously. Oxfam estimates that their return on investment for tax lobbying includes lowering their tax bill by approximately $313 billion on offshore earnings alone, with additional tax savings on earnings sourced in the US.

Before passage of the new tax law in December, US companies operating abroad were required to pay the US corporate income tax on all earnings regardless of where the earnings were made. The new tax law switches the US from a worldwide tax system to a territorial tax system for corporations, which in effect limits US taxation on income earned within US borders, and, among other things, delivers a massive one-time tax cut on the profits US companies made overseas, for which they are required to pay a repatriation tax to facilitate the transition into the new system.

The trend of corporations lowering their contributions to public finances fuels the scourge of poverty and inequality in the US and abroad. When governments capitulate to companies on tax, social spending on programs that help level the playing field between rich and poor are often sacrificed. At the same time, governments attempt to make up revenue shortfalls through regressive taxes that hit the most vulnerable hardest.

Companies possess immense power and influence and it is encouraging to see them using their corporate voice on the social and economic issues of the day. The private sector can influence our society for good – including supporting policies that reduce poverty and increase human dignity around the world – or toward less benevolent ends that will have detrimental impacts on us all. Here’s hoping they will put their money and where their mouth is.