Taxing Corporations

Republicans are always complaining corporate taxes are too high even though many of the most profitable corporations in the US don't pay any taxes, in fact many receive money from the government. At the same time, the Supreme Court, presumably in some kind of rare alcohol induced stupor, ruled a long time ago that corporations are persons, with all the attendant rights of persons. As persons, surely they should pay the same taxes as regular citizens. So do the Republicans want corporations taxed as people, or do they want them to get a break?

I propose a novel solution. While I am unabashedly a bleeding heart liberal, I can see an argument against taxing corporations on the grounds that they are ultimately owned by persons as shareholders and tax is already due on dividend income or on capital gains when shares are sold and on salaries paid by corporations to individuals. So I propose a swap. Congress ends the fiction of corporations as persons, and at the same time exempts corporations from paying taxes on their profits.

As usual, the devil is always in the details, so I explain some of the proposal in detail. Since corporations will no longer be persons, they will no longer have the rights of persons. Thus they will have no right to make political contributions of any kind. Nor will they have the right to petition Congress. Obviously, shareholders may make political donations, and lobby Congress but that must come out of their personal finances. The corporation may not reimburse them. All lobbying and contributions must be paid for out of income that has been taxed. Additionally extremely strict rules will have to be put in place to ensure that NO corporation money is spent on any executive. For example, any use of a corporate asset, such as a company airplane for personal use must be paid for by the employee from after tax salary. I would prefer for the rules to be simple, but the corruption inherent in all corporations means that anything not explicitly excluded will be used as a loophole. If corporations are to be conducted solely as corporations then no one can really complain at these restrictions. To argue against these restriction is really a tacit admission that corporations really want to buy government, a feat they are well on their way to accomplishing at the present time. Corporations would also not have any freedom of speech. They can advertise their products; they can report on their financial statements, but they are prevented from making political statements. Note that the owners, or stockholders, still have all of their rights - they are not infringed at all. But if stockholders are to be free from paying taxes, then it is reasonable that they must lobby Congress as individuals to allow for a favorable climate.

This seems to me like a very fair swap and might well return corporations to their original purpose. In case we forget, the basic purpose of a corporation is to allow people to invest in an idea but without putting all their personal wealth at risk if the corporation fails or misbehaves.

Obviously a lot of meticulous drafting would need to be done to ensure the idea is practical, but this should be possible if there is a serious desire to do so.