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Abstract

It is commonly asserted that such large corporations have used political influence to secure special tax benefits to reduce their respective tax liabilities. The present study investigates whether, in fact, there is a relationship between corporate political influence and corporate tax liabilities. Specifically, this study examines the relationship between corporate political action committee (PAC) contributions made during the 1983-1984 election cycle and the effective corporate tax rates imposed on the related corporations in 1985.

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