Study Finds that Companies with Republican-Leaning Leaders Pay More in Taxes
Posted by Jim Hoft on Thursday, July 12, 2012, 5:10 AM
A study by researchers Dane Christensen and Dan Dhaliwal found that companies with conservative-leaning CEO’s pay more in taxes than companies with liberal-leaning CEO’s.
The Washington Post reported:
Take a guess: Who do you think pays more in corporate taxes, companies with CEOs who favor the Republican party, or those with CEOs who tend toward the Democrats?
If you guessed the latter, you’re wrong, according to a paper that will be presented Aug. 7 at the annual meeting of the American Accounting Association in Washington, D.C. The study, which was led by researchers at the University of Arizona, finds that companies helmed by executives who lean Republican each pay an average of $12 million more in annual taxes than companies headed by Democratic-leaning managers. With a mean pretax income of $541 million for companies in the sample, the difference results in an extra 2.22 percent in taxes paid.
Yet why would these companies, the ones run by leaders who support a political party that is currently refusing to consider higher taxes, be the very ones to pay more? Because they tend to be more conservative, the researchers say, and “[p]sychology research shows that conservative individuals tend to be more risk-averse, fear losses, value financial security, and try to avoid uncertainty.” As a result, the researchers Dane Christensen and Dan Dhaliwal found, conservative nature trumps political ideology.
To perform their study, Christensen and Dhaliwal looked at all executives listed in the ExecuComp database between 1992 and 2008, used personal political contributions data from the Federal Election Commission to determine those executives’ political persuasion, and examined two common measures of tax avoidance over the years: each company’s effective tax rate (GAAP ETR) and cash effective tax rate (Cash ETR). “We find that when the top executive team’s political preferences lean toward the Republican party, their firms have significantly higher GAAP ETRs and Cash ETRs,” the two summarize in their paper.
Christensen and Dhaliwal make a convincing case that it is the conservative nature of managers, rather than any number of alternate interpretations, that explain their findings. Many skeptics, for example, are likely to question whether CEOs’ campaign contributions might have to do more with trying to influence legislation or corporate interests than their true political leanings. But by averaging contributions over a number of years, they say, motive-driven financial donations don’t have an effect on the results.
Hat Tip Robert Mayer
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snap boy commented:
“More risk averse” or more law-abiding? I’ll bet democrats are much more likely to cheat – which has little to do with worrying about risk and more to do with an inability to feel shame or appreciate societal ethics.
Ripped commented:
Just like a liberal to spend someone elses money or steal it as in the case of Former MF Global chief executive Jon Corzine “he doesn’t know what happened to $1.2 billion in missing customer funds”.
Limousine Barry commented:
Great! That’s what I want!
I want to take money from the job holding republican’s and give it to the democrats on the dole. It’s a great vote buying scam. Ha-ha!
I find it humorous that until now you have not figured out my scam! It’s simple! Just steal money from my opponents and give it to my supporters. It’s not original but it works!
I have full control of Eric Holder and Timothy Geithner! Together they control the law, the IRS and the Secret Service! We will see who gets screwed! Ha-ha!
My black bus is broken down on the road. I have moved to my Limousine. David Axelrod will be hatching a new scam to swindle what few donors I have left. I cannot go into specifics at this time. Good day.
feduptoo commented:
Shouldn’t the Dem Party be concerned as to why they want to raise taxes, yet Democat CEO’s find ways not to pay more in taxes already?
Ryan commented:
Libs are just going to say that Republicans represent the higher end of the spectrum of businesses looked at and that’s why their average taxes are higher. They are the higher end because those darn evil Corporations are in bed with the Republicans. right?
dmacleo commented:
#6
the first comment (from linked article) pretty much said exactly that.
Highlander commented:
They pay more taxes because they obey the law. Laws mean something to conservatives – evn ones the don’t like. Liberals – not so much.
GP Fan commented:
Re: #1 #3
That was the very first thing I thought too! Textbook libs, always looking for any/all ways possible to scam the system. In many cases they just don’t pay their taxes at all. We often hear about yet another, who owes millions in back, while simultaneously ranting and raving about the rich not paying their fair share. Ever the hypocrites.
I also remember hearing about some of them planting gardens or purchasing a few animals, claiming they were farmers so they could get big tax breaks. Then there was the yacht incident, (Forgot who now). To avoid the tax in their own state, they kept it docked in the next neighboring state that didn’t have that tax. (They probably voted for it.) Libs are renowned schemers and scammers to increase their worth, and Pelosi is a textbook case of it. She’s a textbook case of exactly what’s wrong with Washington!
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