Warren's Excessive Lobbying Tax and Rent Seeking

As part of her bid to win the Democratic Presidential Nomination, Sen. Elizabeth Warren proposed an “excessive lobbying tax” earlier this month, which would require “companies that spend between $500,000 and $1 million per year lobbying the government to pay a 35% tax on those expenditures.”  For companies spending more than $1 million per year on lobbying, “the rate would increase to 65%, and for every dollar above $5 million, it would increase to 75%.”  Warren argues that the revenues from this tax, which could exceed $1 billion each year, would be used to limit the influence of lobbying in federal agencies, and there by limit the rent seeking activities of big corporations. 

But would this tax really stop rent seeking?  I think it depends on the size of the rent.  if the tax raises the costs of lobbying to the point that they exceed the potential profit from the rent, then corporations will stop rent seeking.  On the other hand, if the potential profit from the rent exceeds the cost of lobbying, including this new tax, corporations will continue rent seeking.  In this case, the tax will only increase the dead weight loss that results from rent seeking activities.