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Friday, May 6, 2011

About Last Night's Republican Presidential Debate

Just a quick note, because this is something that has bugged me for some time, because there is just enough of the hint of truth in it to turn it into a Zombie Conservative Lie such that it never dies, and because I haven't seen anybody else mention it yet. In fact, I have yet to see anybody remark on this statement at all, even though it is easily the most radical thing to have been said last night.

During the debate, Gary Johnson announced that he was in favor of ending - completely - all corporate income taxes. He justified this by arguing that corporate income is money that is "taxed twice." We all own the corporations, he said, so when a corporation makes money that money is taxed, and then when it is distributed to "us" it is taxed again and that isn't right. (Let's just skip over the fact that most Americans do not, in fact, own corporations, or even any stock in a corporation other than what might be held by our mutual funds.)


This is the kind of conservative doublethink that drives me up the goddam wall. Ever since an unfortunate throwaway bit of Supreme Court dicta in Santa Clara County v. Southern Pacific Railroad Company (1886), corporations have been increasingly recognized as having all the rights and protections afforded natural citizens. And for decades they have lobbied for even more of the rights and protections afforded to real people. This directly led to last year's Citizens United case, in which the Supreme Court ruled that corporations have 1st Amendment rights that cannot be restricted by campaign finance laws regulating corporate speech prior to an election. This is why corporations now have the right to flood campaigns and the airwaves in an effort to get business bootlickers elected to office, where they can further carry out corporate will.

But now, suddenly, when it comes time to pay taxes . . . oh, it is unfair to tax the poor corporations, they aren't real boys Pinocchio! They're just fictional citizens who have to turn their money over to the real people who own them, and since we are going to tax those real people when they get their money it would be unfair to tax the corporation when it gets that money first.

In fact, Johnson's position is even worse than equating corporations with real people. What Johnson is plumping for is a tax system that would treat corporations better than it treats real people. If I am one of the increasingly few people in this country to have a great job and make, say, $500,000 a year, I have to pay income tax on all of that. And if I give $50,000 a year to my wastrel nephew, he will then have to pay taxes on that income too. And this makes sense, because I am not obligated to give that money to my nephew; I might just decide to keep it and spend it all on the things that I need (mortgage payments, food, etc.). Since there is no guarantee that I will ever pass anything on to my nephew, it doesn't make any sense for the government not to tax me on all of my income. And because whatever I pass on to my nephew counts as "income" for him, he has to be taxed on that money too.

But if I were a corporation, that fact alone is sufficient reason for Johnson to decide that all of my income should be untaxed. Even though, as a corporation, I am under absolutely no obligation to pass that income on to my shareholders. As a corporation, I could just decide to spend that money on myself (salaries, supplies, overhead) or - alternatively - I could just park it all in an investment portfolio and let it continue to appreciate. But nevermind, says Johnson, corporations aren't "real people" and we shouldn't tax any income they make unless and until that income is passed on to "real people."

And that right there is what makes me crazy whenever I have to think about what passes for conservative "ideas" -- trying to have a debate about any of these ideas (like corporate citizenship) is like trying to nail jelly to a wall. I can detect no whiff of consistency, no intellectual honesty, no underlying principle that explains what these people believe other than that the awesome might of the federal government should be put in harness to support and succor the most powerful among us, the ones who (you would think) don't need any more help. Any argument that furthers this cause -- even one that directly contradicts every other argument conservatives just made -- is, for these people, equally valid.

Correction:  Someone pointed out to me that the "wastrel nephew" analogy is not entirely correct.  The first $13,000 to be given as a gift would not be taxed at all; thereafter, the remaining $37,000 would be assessed as a gift tax (paid by me).  Still, I think the larger point still stands.  The gift tax rate is comparable to the income tax rate, so those monies still get taxed twice when earned by an individual -- once when first earned, and then again when transferred. 

Johnson's proposal still grossly favors corporations, which would be free to maintain and build up huge investment portfolios with income that had never been taxed.  What's more, unlike income earned by individuals this corporate income would be taxed only once -- when and if it is ever transferred to shareholders.

(Thx to Zack from the SFV, over at the Daily Kos, for the correction).

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