The only war worth fighting is a class war.

Select Page

I’m just starting to get used to the idea that corporations are people, entitled to express their political viewpoints and to spend as much money as they want communicating those viewpoints. I’m still a little shaky on the the concept. After all corporations cannot be prosecuted for murder. A corporation can’t even get a parking ticket! That added to fact that shareholders (real people) enjoy limited or no liability for a corporation’s debts or crimes.

But hell, this is the 21st century where anyone with the money and the guts can breathe life into a legal fiction.

But last week, President Barack Obama proposed cutting the top corporate rate to 28 percent from 35 percent, addressing a long-standing gripe by U.S. corporations that the rate is too high.

Republican hopeful Mitt Romney also unveiled proposals of his own calling for capping the individual income tax rate at 28 percent, down from 35 percent, and slashing the corporate rate to 25 percent, among other steps.

Now I’m starting to feel queasy again. After all, the top tax rate for individuals is still 35%. Why would  our leaders propose a decrease in that rate for people just like you and me who happen to have a slightly different last name? Suddenly, assuming an income in the top tax bracket,  Joe Martinez pays a 35% income tax and  Joe Martinezinc only pays 28% (25% under Romney’s plan). How can that be fair?

It is already problematic that certain “persons”, without really moving there, can rent a post office box in the Cayman Islands and avoid paying their US taxes.

I had to go back to Citizens United v. Federal Election Commission, (2010) 130 S. Ct. 876  to understand why the president might buy into lowering the corporate tax rate.

Citizens United overruled Austin v. Michigan Chamber of Commerce (1990) 110 S. Ct. 1391. “Austin found a compelling governmental interest in preventing ‘the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas.'”

The Court based its decision in part on the argument that Austin

Permits the Government to ban the political speech of millions of associations of citizens. See Statistics of Income 2 (5.8 million for-profit corporations filed 2006 tax returns). Most of these are small corporations without large amounts of wealth. See Supp.Brief for Chamber of Commerce of the United States of America as Amicus Curiae 1, 3 (96% of the 3 million businesses that belong to the U. S. Chamber of Commerce have fewer than 100 employees); M. Keightley, Congressional Research Service Report for Congress, Business Organizational Choices: Taxation and Responses to Legis-lative Changes 10 (2009) (more than 75% of corporations whose income is taxed under federal law, see 26 U. S. C. §301, have less than $1 million in receipts per year). This fact belies the Government’s argument that the statute is justified on the ground that it prevents the “distorting effects of immense aggregations of wealth.”

Now I get it! Because the corporate tax rate is not graduated, Mr. Obama and Mr. Romney are just looking out for Mom and Pop corporations. It certainly would not be equitable to to apply the same tax rate to poor corporations like Exxon and General Electric who, evidently, couldn’t afford to pay their corporate taxes last year.

To be fair, the President’s proposal does include methods to close some loopholes and to begin to establish “a new minimum tax on foreign earnings—while repealing deductions for shipping jobs overseas and providing new incentives for bringing jobs back home.” But it is still based on a pervasive, neo-liberal fear that we need the so-called job creators more than they need us.

The real problem lies here:

As with personal income tax rates, the corporate contribution to to tax revenue has steadily declined since the introduction of the plague known as Reaganomics. Corporate taxes have plummeted as a share of total federal revenues. In 1953, under President Dwight Eisenhower, a Republican, corporate taxes accounted for 32 percent of total federal tax revenues. Now they’re only 10 percent.

The President’s proposal is another ass-backwards attempt to band-aid a thoroughly corrupt tax code. I say ass-backwards because the first thing to do is to close all the loopholes and then assess the fairness of a given tax rate, not the other way around. If history holds true, corporations will continue to get their tax reductions and their write-offs. And “close the loopholes” hoopla can be saved for the next election.

Indeed, some “persons” are and will continue to be better than others. I gotta figure out how to get my name changed to Roy Battyinc.