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Billionaires’ Return on Investment for Political Contributions

Sheldon Adelson, billionaire casino magnate, has pledged $100 million to defeat Barack Obama this year. During the Republican primaries, he spent big on attack ads against…Mitt Romney? Yep…Adelson’s Republican of choice was Newt Gingrich, and Adelson spent almost $20 million on Gingrich’s campaign. Now, Adelson backs Mitt Romney, Republican candidates for congress, and Super PACs that attack President Obama.

For a billionaire with casinos in the U.S. and China, this money is meaningless…a drop in the bucket. But why would one man give so much money to Republican congressional candidates and to stop President Obama from being reelected (especially when he’s done so well during Obama’s first term)?

One thought is that it’s a straight “gamble”, with a huge potential return on investment.

Obama, if reelected, has said he will increase taxes on the wealthiest Americans, so that people like Mitt Romney, who paid a 13% tax rate in the only tax return that he has released, will end up paying around 30%, like the rest of us. Adelson is worth about $25 billion, and given that he probably has accountants working to reduce his tax rate to where Mitt’s is, he’s probably paying about 13% as well. If Obama is to be reelected, one analysis of Adelson’s additional tax obligation put the number at about $1.3 billion over the likely remainder of his life (Adelson is 79, and can be expected to live another 8 years or so, based on life expectancy data).

When you look at it that way, what’s $100 million to gamble on Romney and a Republican congress that is hostile to President Obama and will obstruct his attempt to raise taxes on the ultra-wealthy?

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Written by Scott Cooney

Scott Cooney (twitter: scottcooney) is an adjunct professor of Sustainability in the MBA program at the University of Hawai'i, green business startup coach, author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill), and developer of the sustainability board game GBO Hawai'i. Scott has started, grown and sold two mission-driven businesses, failed miserably at a third, and is currently in his fourth. Scott's current company has three divisions: a sustainability blog network that includes the world's biggest clean energy website and reached over 5 million readers in December 2013 alone; Pono Home, a turnkey and franchiseable green home consulting service that won entrance into the clean tech incubator known as Energy Excelerator; and Cost of Solar, a solar lead generation service to connect interested homeowners and solar contractors. In his spare time, Scott surfs, plays ultimate frisbee and enjoys a good, long bike ride.


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