Proxy Tax

AAA

DEFINITION of 'Proxy Tax'

A tax on lobbying or political expenses that exceed an allowable amount set by the IRS. The proxy tax rate is set at the same rate as the highest corporate tax rate for that particular year. Organizations may be required to pay a proxy tax if they spend more on lobbying efforts than they initially estimated, or if dues used to pay for lobbying were lower than expected.

INVESTOPEDIA EXPLAINS 'Proxy Tax'

A proxy tax is a penalty, and can also be accompanied by other charges or penalties. If an organization pays a proxy tax on all of its lobbying expenditures then it allows members, whose dues paid for those efforts, to be able to deduct the value of their dues from their taxes.

RELATED TERMS
  1. Bag Man

    Any person in charge of organizing, collecting and transporting ...
  2. Formal Tax Legislation

    The process by which a proposed tax rule or tax change may become ...
  3. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  4. Legislative Overkill

    A law enacted to stop or prevent the abuse of a loophole, but ...
  5. Tax Schedule

    A rate sheet used by individual taxpayers to determine their ...
  6. Proxy

    1. An agent legally authorized to act on behalf of another party. ...
Related Articles
  1. Taxes

    Tax Deductions You May Be Missing

  2. Taxes

    5 Tax Credits You Shouldn't Miss

  3. Taxes

    The History Of Taxes In The U.S.

  4. Taxes

    10 Most Overlooked Tax Deductions

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center