The fact is and shall continue that corporations are lawful people. I don’t agree with it, but that is how it is and there is not a lot of momentum to change that. After all, the law is time stamped with the rule of a century in legal cases in defense of corporations, branding them in to the American fabric. Corporate persons now choose Congressmen, Presidents, and manipulate the masses through media to obtain their profitable interests. Sounds awful, right? But if that were applied to all kinds of people, not just the billionaires and millionaires, wouldn’t that alter the affect?
From this point of view, I have 3 reforms to make corporate personhood okay. They are totally untested and politically impossible, but what the heck, lets have a go of it.
1. Abolish Corporate Taxes and Merge with Non-Profits
This is where my liberal friends will get lost, so I bring it up first, to appeal to my conservative friends. Yes, I am in favor of abolishing corporate tax. As a former non-profit executive, I could see the benefits of applying all of the corporation’s revenue back in to programming, as designed with a tax-exempt model. It supported jobs and fair wages to artists. But fundraising options and overall accounting limitations made it wholly ineffective to operate a tax-exempt corporation, because IRS rules and a volunteerism culture built-in, make it particularly unrewarding for executives and professional staff. In fact, Board members are expected to pony up cash and volunteer for the honor of their position. Meanwhile, investors profit heavily from tax-paying corporations while directing policy. It is the stark opposite.
But if non-profit principles were applied to all corporations, the free trade of arts, health, and science would have an immediate impact on the products and services available in the marketplace. Then we would have an equal playing field for the cause of good. The way that non-profits are required to operate is absurd compared to the damage done by for-profits for lack of corporate regulation. I say, what is good for the goose is good for the gander. Investors should only pay taxes on the profits earned from their own capital invested in to public corporations.
From this point of view, persons are still taxed, but corporations become expressions of personhood, not actual personhood. It would be more consistent this way. You can not indict a bank and send it to jail, but you can a group of executives. Moreover, the whole reason for corporate personhood is to justify taxing corporations. Eliminate the tax, eliminate the justification, and it makes corporate personhood moot.
2. Return to Roosevelt Income Tax Rates
With the Roosevelt generation, healing from the Great Depression, they could see the imperative of defending American interests from utterly corporate interests. Persons who stood to gain extraordinary advantage over anyone else, a person who could amass the wealth of a small nation working together with other wealthy persons, could hijack the political process and wipe out America’s economic mobility. This is what happened during the Reagan and Bush Era from 1980-2008. This is why Roosevelt had the 90% tax rate in place through Eisenhower. Sadly, Jimmy Carter ushered in the trend in the late 1970’s.
But at what level do you tax at 90%? One billion dollars seems like a perfectly good number to me, but I would fear civil war, honestly. The 1% would form a new confederacy if you tried to take tens of billions from them in one fell swoop–especially if Obama was doing it. Or you could start where they are. Bill Gates can keep his $50 billion, but he shall never see a penny above that again, probably for the rest of his life, while income levels redistribute.
It makes hoarding money very expensive and keeping money in the markets very useful. It also makes paying higher wages a disadvantage, up to a point. That point is where jobs are created. One seven-figure earner would give way to several six-figure earners. This is better for the lot.
3. Sell 49% of Public Stock to Employees
How to do this frankly is beyond me. But suppose that Apple Employees Inc. were set up to maintain an investment portfolio with Apple shares for their backbone. The employees become responsible for maintaining growth. If United States federal law required Apple (the tech company) to accept this massive shareholder with representatives on their Board of Directors, some decisions would change. The Board is still there to generate as much profit as possible, but under new reforms, they must do that while returning revenue back in to programs. Would you suppose that Apple could continue to generate billions in profit annually while paying a meager $1,000 per year to workers of poverty-stricken families in far-off countries? I suggest that there would be pressure to invest in jobs in America and manufacture here. A zero tax rate would enable the reinvestment.
Moreover, if families of Apple employees started their own small LLC with profits from Apple, they would have a better opportunity to reinvest in their own. Suppose you bring home a dividend from your stock portfolio and don’t want it taxed, then you put it in your family LLC to invest in business activity, whatever it is. This would drive the marketplace on every front. But when it comes time to withdraw for college, you have increased your capital for that very purpose and the law would enable some way to pay tuition from your LLC without tax penalty. But if you want a vacation, a bigger house, a new car, then that would be counted as income and you would be taxed within the bracket you match.