Are Corporations Getting Tax Breaks for Super PAC Donations?

Supreme Court

The Supreme Court’s 2010 Citizens United decision has had a lot of unexpected consequences. Corporations getting tax breaks for political donations is just one.

The majority of Americans already hate super PACs, those non-campaign organizations able to raise and spend unlimited amounts on campaigns, thanks in part to the Supreme Court’s 2010 Citizens United decision. Corporations and unions alike are able to donate to super PACs and thanks to a complicated system where super PACs partner with nonprofits (also known as 501(c)(4)s, from an IRS tax code), their donations can be nearly anonymous.

ProPublica reports that along with anonymity and the lack of limits on donations, corporations might have another good reason to donate to these groups:

Companies also may be deducting from their taxes the undisclosed donations to these groups.

“There has always been this suspicion, but I can’t prove it,” says Frances Hill, a tax law professor at the University of Miami who first floated the concept in a brief mention in The New York Times earlier this month. “It could be put into the advertising budgets, which for many companies are very large dollar amounts.”

This is where the aggressive interpretation of the tax code would come into play.

Corporations are allowed wide latitude in deducting business expenses from their taxes — everything from workers’ salaries to marketing expenses of all kinds. But one thing they’re explicitly barred from deducting is political expenditures.

Due to the serious disclosure deficits with these donations, nobody is sure if this tax strategy is actually happening. But legally speaking, it’s a possibility. And that’s something that should scare all of us.

Read more:

ProPublica: Could Corporations Take Tax Breaks on Political ‘Dark Money’?

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