Corporations Are People Except When It Really Matters

We know, because the Supreme Court and Mitt Romney told us, that corporations are people. And we know, because we have been at war for more than a decade, that it is people who fight our battles and who get wounded and die for our country. It is people who are persuaded that, sometimes, it is necessary to summon up the courage necessary to sacrifice for a cause greater than mere individual self interest.

We call that patriotism and such patriotism is taught to our children, when we take them to parades where old men in uniforms wave to the crowds, when they hear Taps played at funerals of the fallen, when they see the President place a wreath at the Tomb of the Unknown Soldier. We teach this kind of patriotism to our kids because the national well-being may one day require some amount of sacrifice on their part, if we want to remain strong and free.

But for all the lessons on sacrifice we teach to our young ones, for all the talk of patriotism we try to instill in our people, some people among us—those now disguised as corporations—reject that message. These corporate-people don’t give a damn about sacrifice or patriotism or anything except one thing: keep as much money as possible away from the government, away from the entity that enables these corporate-people to thrive and profit.

From Citizens for Tax Justice via MSNBC this morning:

corporations hiding money

One panelist on Morning Joe tried to make the point that this was all perfectly legal. That there is a distinction between tax “avoidance” and tax “evasion,” the first being okay in the eyes of the law and the second bringing down the real fury of the IRS on the guilty.

I suppose, during any of our wars involving conscription, a person who refused military service could have claimed that he was merely avoiding the draft and not evading it and then throw himself on the mercy of the court, but I would not have liked his chances because at one time we actually required young men to go and fight and, if necessary, die for America.

But the truth is that all this tax avoidance-evasion is perfectly legal, if perfectly dreadful and absolutely unpatriotic. And as long as lawmakers, most of them Republicans, honor this practice rather than abhor it, as long as they enable it rather than abolish it, the practice will continue and our country, for which many real people have fought and died, will suffer.

20 Comments

  1. Tax avoidance by international corporations, like Apple for instance, is a conundrum for sure, but one might question whether it’s naive to expect corporate tigers to yield out of mere patriotism. There have been times when I’ve thought that perhaps the corporate income tax ought to be abolished entirely just because the new reality of a global economy makes it so easy not only to avoid taxes but to off-shore whole operations. But, this being an area out of my expertise and personal experience, I visited the NY Times editorial board on the subject. They make a good case for keeping it, mainly because it works, despite avoidance shenanigans, and perhaps more importantly, because of the Willie Horton maxim. That’s where the money is.

    The board’s reasoning makes sense to me. Here are the concluding paragraphs of their editorial:

    Another flawed notion is to raise taxes on dividends and capital gains as a replacement for a corporate income tax. Taxes on investment income should go up for many reasons — but that does not mean corporate taxes should be scrapped. Current low rates on investment income only encourage aggressive and abusive tax sheltering, in which individuals characterize ordinary income, which is taxed at rates as high as 39.6 percent, as investment income, which is taxed at a top rate of 20 percent.

    Low rates on investment income, which flows overwhelmingly to the wealthy, also exacerbate inequality. Unfortunately, the thrust of tax policy — supported by Republicans and Democrats — over the last 25 years has been toward low rates on investment income. There is currently no political will to reverse course, and even if there was, raising investment taxes would not be a suitable replacement for corporate taxes. That’s because corporations decide when to pay dividends and investors decide when to realize capital gains. No government can function well without knowing when it will collect big chunks of needed revenue.

    Corporate taxes need to be reformed to ensure that the profits of American multinationals are taxed by the United States when those profits are earned. In an era of mobile global capital, that will require international cooperation, a painstaking process. In the meantime, however, there are many steps Congress can take to curb tax avoidance, like ending procedures that allow companies to easily shelter profits abroad.

    Congress should also follow the lead of the European Union in pressing ahead with laws to require corporations to report their profit and taxes on a country by country basis. Disclosure and exposure have a role to play in changing corporate norms. After all, multinationals want to be viewed positively and for some, like Apple, their image is part of what they sell. Under today’s corporate tax system, tax avoidance may be legal, but it’s hardly the stuff of a good reputation.

    So, is Duane being naive to appeal to patriotism in this cause? No, I conclude, not at all. That’s exactly the stuff of reputation they’re talking about. Now we need Congress to do their patriotic duty and fix the system.

    Like

    • Jim,

      I hadn’t seen that editorial, so thanks for posting part of it. I, too, was almost persuaded by those who think we need to eliminate the corporate tax (although I could be persuaded, if a more progressive tax were proposed to replace it, something that ain’t gonna happen). At the very least, as the NYT points out, “ending procedures that allow companies to easily shelter profits abroad” should be the first thing Congress should do. Which means, of course, that it will be the last thing it will do.

      Duane

       

      Like

  2. ansonburlingame

     /  June 4, 2013

    Duane,

    Comparing legal tax avoidance, try calling it limiting tax liability, to patriotism on a battlefield is a real stretch, in my view. A soldier is trained to MINIMIZE his (or her) risk in battle. A businessperson that fails to minimize financial risk would not last long in that job, anymore than a soldier the “went over the top” (or ordered his men to go over the top) would be considered a wise soldier. So I caution prudence in such thinking.

    As well, in arguing the “nitty gritty” in tax policies, focusing just on corportate tax policy, is the wrong approach as well, in my view. Our tax laws are too complex today for most people. Tightening up “loopholes” has failed, miserably over the last few decades. All we have done is increase the complexity of tax laws in such efforts.

    Since just before WWI America decided to fund the federal government primarily through taxation of “income”, call it profits for businesses. I go to work and come home with more money than I had before going to work. America said tax that income to fund government. I run a business and at the end of the day have more money than when the day began. Tax that money earned said America.

    To me at least, it is fundamentally really simple. Look at what you had before and what you have now and tax the difference, to support the governments. If such was done, a straightforward and very simple tax on income or profits, then every tax return in America could be reduced to a post card return. Add up all your income, no matter the source, (or profits for businesses), apply a percentage on that one number, write a check and return it with the post card. Very simple, right?

    THEN we can argue over who pays what percent on one individual number (for individuals or businesses). Again, simple argument, no loopholes or complex laws to jump through, just apply a given and legal percentage to one number and ALL Americans fund the governments around the land.

    But in the end, taxation is not the real problem, financially today in America. It is what the governments spend that creates the problem, particularly when for 50 years they spend far more than is “made” by governments. Politicians have little concern for how much they spend but are very shy about demanding the taxes really needed to support such spending. And by taxes, I mean the money collected from ALL Americans, not just slices of Americans.

    Anson

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    • Anson,

      I was not really comparing “legal tax avoidance” to “patriotism on a battlefield.” What I was doing was pointing out, given those on your side who want to view corporations as people, how patriotism ought to extend to a corporation-person’s willingness to pay taxes. I was attempting to expand the definition of patriotism to include other ways of taking care of the country besides putting oneself in harms way.

      And, as you know, I think the spending-revenue problem is not just the fault of politicians. It is the fault of the American people, who vote these politicians into office. Many Americans want to have a great country on the cheap. Can’t happen. And part of the fault I will lay on the press. They make the political fights over the budget the news, when the news ought to be that the country’s infrastructure is falling apart, there is chronic unemployment, and millions of Americans will still not have health care because Republican governors and legislatures are rejecting Medicaid expansion under ObamaCare.

      Duane

       

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  3. Duane,

    Well, here you go again – poking at my meager brain to make me come up with a pithy mind-bender for you to consider. Actually, I think you make some interesting points here. But . . .

    I don’t think there is a moral equivalence between a corporation that doesn’t pay taxes and a soldier who is willing to make the ultimate sacrifice. In the former case, nobody dies. And that comparison would be the same if you used a sole proprietorship rather than a corporation. In fact, if you want to kill a corporation all you have to do is get the state to revoke its charter. It can’t legally conduct business without a charter. (Play Taps here.)

    I think everyone knows what patriotism is, and it has nothing to do with taxes; paying them or not paying them. If corporations are legally avoiding taxes, it’s because Congress passed laws that enabled to do so. Therefore, it’s the people who voted for their representatives in Congress who are unpatriotic. Ooops.

    And of course, all the tax nonsense can be easily dealt with by throwing out the old tax code and establishing a new simplified version. But there is no political will to do so, not to mention politicians’ reluctance to shoot the golden geese that keep them in office.

    Personally, I would opt for a simple corporate sales tax. Using IRS data (http://www.irs.gov/uac/SOI-Tax-Stats—Historical-Table-13), I found that for 2010, total corporate receipts were $26.2 trillion and total income tax paid was $358.4 billion, or 1.37% of total receipts. If a corporate sales tax was set at just 2.5%, then total taxes would be $655 billion, which is over $296 billion more than income tax. That’s an 88.3% increase! Plus, corporations with gross receipts from any source, which is all of them, would be paying taxes – and that includes Apple and GE.

    But such a tax structure would surely end up putting a lot of lobbyists our of work, not to mention a lot of IRS employees. On the other hand maybe they’ll see it as their patriotic duty.

    And don’t call me Shirley!

    Herb

    Like

    • ansonburlingame

       /  June 5, 2013

      Well said, Herb.

      Anson

      Like

    • Herb,

      Surely, you are wrong about this:

      I think everyone knows what patriotism is, and it has nothing to do with taxes; paying them or not paying them.

      Patriotism is defined as “love for or devotion to one’s country.” How can you love your country, how can you be devoted to it, and yet avoid paying taxes to support it?

      Sure, it is perfectly legal for corporations to shelter enormous profits overseas. But that doesn’t make it morally right. If those shelters were used for more productive things that would be one thing. But they are used only to avoid paying taxes that would otherwise go into the Treasury, you know, the same Treasury that pays for real patriots to go overseas and defend the goddamn world, including the world’s corporations, from tyranny.

      By the way, impressive as your presentation was, I’m not sure I understand your corporate sales tax idea. My idea of corporate sales taxes is when the corporation acts as an agent of the government to collect taxes from consumers. So, I’m not sure what you mean and who would actually pay this tax. Surely, you can explain.

      Duane

      Like

      • Duane,

        (Part 1 of 2)

        Well, it seems were getting all semantical here. Person. Patriotism. Morality. Love and devotion. Not all the same nor, in many circumstances, are they even related.

        Notwithstanding Supreme Court Rulings to the contrary, corporations are not persons in the way individual citizens are persons. See https://en.wikipedia.org/wiki/Corporate_personhood. They have certain rights as a group of people, but not most of the rights of individual persons. Therefore, the question is what are the actions of a corporation, specifically a for-profit corporation, that would make it patriotic or unpatriotic? Well, if patriotism means following the law and a corporation follows the law regarding its liability for income taxes, then that corporation is patriotic by definition. Therefore, it would be unpatriotic to illegally “evade” taxes.

        Now, morality is another problem. “Morality” refers to beliefs and practices about good and evil by means of which we guide our behavior. Corporations, at least those trying to earn money for their investors, are guided by profits. And as we know, morality is sometimes thrown under the bus.

        So, for example, a common way for companies to increase profits is to cut costs. Some of the bigger companies can cut costs by expatriating jobs overseas, to, say, China, or India, or Bangladesh. But that puts American workers in the unemployment lines, which, these days, is not a good place to be. Now, I personally think this is immoral.

        In a recent article, “Is it ethical to keep buying clothes from Bangladesh?”, The Christian Science Monitor reports, “Labor conditions are so dangerous that an estimated 1,800 garment workers have lost their lives in factory fires and building collapses since 2005. The latest collapse claimed 1,127 lives, the world’s worst industrial accident since 1984.” However, the solution being offered by American companies is not to repatriate jobs back to the U.S., but to make the textile industry in Bangladesh safer.

        The CSM goes on, “‘There is a moral imperative for companies that have been in Bangladesh for a substantial time and have benefitted from the comparatively low wages there’ to keep operations there, says David Schilling of the Interfaith Center on Corporate Responsibility (ICCR), a New York-based coalition of institutional investors. ‘The risks have jumped off the charts. But let’s stay and minimize the risk factors.’” Of all the major corporations buying clothes from Bangladesh, only Disney has stopped doing business there. Besides, as the man said, the others are only following a “moral imperative” to stay.

        So, there you have it. Corporations apparently declared their moral obligation to help Bangladesh. Just coincidently, that moral obligation also results in higher profits. That says to the American workers here in the U.S. of A., Fuck You!

        The bottom line here is that corporations are only interested in their respective, you know, bottom lines. As I said above, their only obligations are to the law, some of which they help write, and to their stockholders, who, for the most part, could care less about how profits are obtained. Surely, we can all agree with that.

        Herb

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      • Duane,

        (Part 2 of2)

        You and writer89 make good points about the private sector’s avoidance of taxes as being both immoral as to the nonpayment for the government services they receive, and depriving the Treasury of revenue that could be used for other, and higher, purposes. But again, the problem here is not with the businesses, it’s with Congress, and, by extension, the voters – we the people.

        Writer89 argues, cogently, “It is incorrect to say that “no one dies” as a result of tax avoidance on this level. When our government is deprived of revenues that could be used to fund health programs or food programs or housing programs for the poor, people starve to death or die of disease or are cursed with shortened lives as a result of poor health, environmental hazards, and violence in their neighborhoods.”

        The problem is, “tax avoidance” is not the reason for cuts in social programs. When there is a shortage of revenue, the government just issues more bonds and finances those programs with borrowed money. So if corporations were to pay their fair share, whatever that is, the result would be fewer dollars borrowed from China and a reduction in the federal debt.

        Since the funding of government programs is set by the government, then if people die as the result of what you describe above, it’s not because of lower tax revenue, it’s because Congress chose not (or refused) to provide adequate funding for those programs. Blame Congress, not bidness.

        In any case, the morality argument will probably not go very far to convince commercial enterprises to dig into their pockets and pony up what, in the interest of equity, they should pay just for the privilege of doing business in America. So, it seems to me the only way to get businesses, particularly corporations, to pay their fair share is by changing the tax code.

        According to the CCH Standard Federal Tax Reporter, as of 2013, it now takes 73,954 regular 8-1/2″ x 11″ sheets of paper to explain the complexity of the U.S. federal tax code! The good news is that it is only 346 more pages than 2012. And from 1986 through 2011, there have been over 15,000 changes to the tax code. So anybody wanting to get in there and change it, well, good luck.

        Overs the years, many on both the left and the right have talked about tossing the tax code and starting over. This, in my opinion, will never happen. Congress would never agree to it for all kinds of reasons. Nonetheless, we can dream, can’t we?

        That’s why I proposed the 2.5% federal sales tax as a simpler and more efficient way for businesses to pay their fair share. And yes, Duane, like any sales tax, businesses are, in effect, agents for the state in collecting money. But the flip side is they won’t be paying any income taxes; at least corporations won’t. So, there is no advantage for them to game the system, to move money around the globe, or to lobby for even more tax breaks. In fact the tax code involving corporate income taxes would be eliminated, cutting, I sure, several 10’s of thousands of pages out of it. And as I said above, there would no longer be a need for so many IRS agents or lobbyists. A win, win in my book.

        Obviously, a lot more research would have to go into such a proposal and it would have to be refined, no doubt. But it is an approach to think about, though no tax plan will ever be perfect. Surely you can understand that.

        Herb

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        • Sorry if I wasn’t clear, but I DO blame government — the part of the government consisting of legislators who refuse to raise taxes on the rich and corporations, and who then eliminate programs because they claim there isn’t enough money to pay for them. The Fed prints more money and borrows funds to pay its debts, not to fund programs for the poor. In any case, a federal sales tax is not the solution, since almost all economists agree that sales taxes are regressive — just another way to shift the tax burden from the rich to the poor. Just to be sure we’re on the same page here, which I doubt we are.

          Like

  4. LisaF

     /  June 4, 2013

    Corporate “citizens” are only concerned with making more money for their shareholders so their very nature makes them sociopaths.

    Look at what Exxon’s CEO recently said. “What good is it to save the planet if humanity suffers?” LOL

    Like

    • Lisa,

      The biggest joke in what Exxon CEO Tillerson was saying is that he appeared to be concerned about “people’s health and well-being around the world.” Ha, ha. What a knee slapper!

      Duane

      &nbsp

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  5. It is incorrect to say that “no one dies” as a result of tax avoidance on this level. When our government is deprived of revenues that could be used to fund health programs or food programs or housing programs for the poor, people starve to death or die of disease or are cursed with shortened lives as a result of poor health, environmental hazards, and violence in their neighborhoods. In fact, far more people have died as a result of gun violence in our cities than have died in recent wars. This poverty is a direct result of government programs that the right wing won’t fund because “we can’t afford it.” We’d have billions more if large corporations weren’t sheltering their profits offshore. Yes, it’s legal. No, it’s not moral. What’s more important?

    Like

    • Couldn’t agree more, my friend. Well said.

      Like

      • Duane and writer89,

        You guys need to quit embarrassing yourselves. I suggest reading Article 1 of the Constitution, especially Section 8, plus the 14th and 16th Amendments, and then get a book or two on Civics.

        This paragraph from Wikipedia (http://en.wikipedia.org/wiki/Powers_of_the_United_States_Congress) says it all: “Congress has authority over financial and budgetary matters, through the enumerated power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States. The Sixteenth Amendment, ratified in 1913, extended power of taxation to include income taxes.[1] The Constitution also grants Congress exclusively the power to appropriate funds. This power of the purse is one of Congress’ primary checks on the executive branch.[1] Other powers granted to Congress include the authority to borrow money on the credit of the United States, regulate commerce with foreign nations and among the states, and coin money.[2] Generally both Senate and House have equal legislative authority although only the House may originate revenue and appropriation bills.[3]”

        So, even if corporations paid 100% in taxes, Congress does NOT have to “appropriate” funds to feed the poor or heal the sick. It’s the old guns vs, butter debate. So, if anyone dies as a result of under-funding social programs, that’s on Congress, not on corporations.

        This is not rocket science, guys. Geeze . . .

        Herb

        Like

        • Herb,

          Apparently this is rocket science because you’re having such trouble getting your rocket off the pad.

          And rather than me getting a couple of civics books and rereading for the millionth time Article 1 of the Constitution, I’d rather have you reread what writer89 wrote.

          First, yes, you are right that Congress doesn’t have to spend a goddamn dime on the poor or the sick. Yep, that’s right. Our legislators could just sit up there and not do a damn thing for a couple of months and then go home and do more of nothing at all. (Which pretty much is how the House is currently operating.)

          Except that previous Congresses decided to do something, things like Social Security and Medicare and Medicaid and other government programs. And to the extent that all of us, not just corporations, do everything we can to evade paying taxes, then those programs will suffer and, if Congress does nothing to fix them—like close loopholes for corporations and rich taxpayers—then they will die, and so will some folks who depend on them.

          So, while I agree that ultimately it is Congress who made this tax mess and it is Congress who can fix it, what this original piece was about was the duty we owe to our country and the national well-being and whether corporations, who the Supreme Court turned into people, also have a duty to pay into the Treasury, even if they legally and technically don’t have to.

          Finally, back to writer89. He ended with this:

          We’d have billions more if large corporations weren’t sheltering their profits offshore. Yes, it’s legal. No, it’s not moral. What’s more important?

          It is a fact, Herb, that corporations are mostly legally “sheltering their profits offshore.” And for writer89 and for me, that is immoral behavior, in the context of patriotism and what we owe to our country, even if ultimately it is Congress’ job to stop them from doing it so that programs necessary to help struggling folks could be funded. His point was that right-wingers don’t want to fund those programs and won’t budge on additional funding, hiding their intentions behind the deficit-debt issue.

          Thus, this isn’t about rockets or science, Herb. It is about the morality of the issue, something you simply refuse to acknowledge, as you attempt to insult our intelligences with your comment.

          Duane

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          • Duane,

            My rocket is flying just fine . . right up through the hole in your logic.

            To review, what I said, in summary, is that corporations’ refusal to pay any more taxes than the tax code allows IS NOT A STRAIGHT LINE to people dying because of unfunded social programs. I then tried to make that point by directing you to the powers of Congress. It has the sole power to BOTH raise taxes on the wealthy, including international corporations AND decide what social programs they are going to fund. (By the way, I never said “evade,” which is illegal, I said “avoid,” which is what the tax code provides for. Evade is the word you used.) Anyway, you and writer89 didn’t seem to make that connection, which is why I referred you to some civics textbooks. In your zeal to make your caset, you skipped some important points in my analysis.

            You wrote, “While I agree that ultimately it is Congress who made this tax mess and it is Congress who can fix it, what this original piece was about was the duty we owe to our country and the national well-being and whether corporations, who the Supreme Court turned into people, also have a duty to pay into the Treasury, even if they legally and technically don’t have to.”

            I agree completely with that. I was merely pointing out that not everyone, especially international corporations, hold that same opinion.

            But then you say, “the morality of the issue [is] something you [meaning me] simply refuse to acknowledge.” But in fact, what I said was, “the morality argument will probably not go very far to convince commercial enterprises to dig into their pockets and pony up what, in the interest of equity, they should pay just for the privilege of doing business in America. So, it seems to me the only way to get businesses, particularly corporations, to pay their fair share is by changing the tax code.”

            Now how is that refusing to acknowledge the “morality of the issue?” You want to go with a liberal political philosophy. I’m just trying to be pragmatic.

            For example, if those individuals or companies who legally avoid taxes use that extra money to invest in new businesses, or consume more goods and services, which then create more jobs, which create more tax revenue, which can then be used by Congress, if it so chooses to fund social programs, is that immoral or moral? Patriotic or unpatriotic? Duty or not?

            This is your blog and I am a guest. I get that. But don’t get on my case just because I disagree with the practicality of your political philosophy. Among other things, isn’t that what comments are for?

            Like

            • Herb,

              If all you were doing in your responses was to show that corporations don’t have the same opinion about their moral duties to the country that I do, then okay, we are in agreement. But it seemed to me that you were going beyond that. I apologize if I misread or misinterpreted what you were trying to say, but I did not see it as a mere disagreement about the practicality of my political philosophy.

              And of course the comment section is for, among other things, debate, as far as I’m concerned. But between two people, or three, who respect each other, it’s not necessary to say things like,

              You guys need to quit embarrassing yourselves…This is not rocket science, guys. Geeze . . .

              My objection was, first, to the tone of your response and then, second, to your seeming refusal to acknowledge that a corporation’s moral obligation goes beyond the legal one, which, admittedly, Congress controls. Your reference to “Civics” bewildered me, since Civics is exactly what I was arguing, if you define the word as Wikipedia does:

              Civics is the study of the theoretical and practical aspects of citizenship, its rights and duties; the duties of citizens to each other as members of a political body and to the government.

              Theoretical and practical. Rights and duties. Do corporations have the right to avoid-evade (more on my use of those two terms below) taxes? You betcha. But as citizens (the Supremes made them people and thus, by logical extension, “citizens”) they also have duties. One of those duties, it appears obvious to me, is that especially in a time when the country is struggling economically, and when one party has as its political and philosophical mission to starve the government of revenue, then duty, call it “patriotic” duty if you want or call it something else, requires that those with the dough cough some of it up, as opposed to figuring out clever ways to avoid-evade the responsibility.

              Oliver Wendell Holmes famously said that “taxes are what we pay for civilized society,” and if a person or corporation does everything possible—and I’m talking here of elaborate schemes that are designed to do nothing but limit tax liability—to not pay taxes, I find that an affront to civilization. I wouldn’t object for a moment if a company or individual was attempting to create more jobs with their tax avoidance efforts.

              Remember that my original point was that as people-like entities, some corporations acknowledge no duty to the state comparable with the duty some folks feel to risk their lives for the salvation or betterment of the country. Most corporations want the blessings and “rights” of personhood without any of the “duties” that most of us feel, in some way or another, obliged to perform as part of the social contract that made Western civilization.

              At one point in this debate you wrote of corporations:

              As I said above, their only obligations are to the law, some of which they help write, and to their stockholders, who, for the most part, could care less about how profits are obtained. Surely, we can all agree with that.

              I disagree profoundly with the use of the word “only.” There are moral obligations that go beyond the law and some CEOs and stockholders acknowledge them. When Starbucks honcho Howard Schultz came out in support of gay marriage, he was subjecting the company to a potential backlash among teavangelical types. And it came in the form of a couple of boycotts. The National Organization for Marriage started one in 2012 when Starbucks was trading at $53 a share. Today the share price is $65. Schultz took a stand, which brought him applause at this year’s stockholder’s meeting, and the company, which could of suffered financially, prospered.

              I will remind you of Mitt Romney (who claimed that corporations are essentially people) and his 2011 return, which he finally released. It showed that he didn’t take all of the tax breaks that he was entitled to (for his “charitable” giving) and it was obvious he didn’t do so because he wanted to keep his effective tax rate above what he had previously claimed it would be. In other words, he had a reason to pay more than he was legally required to pay, albeit it was a selfish one—he wanted to be president.

              All of which goes to show that when rich people, including rich corporations, sit down to do their taxes (figuratively speaking, since they pay others to do it), there are judgment calls as to what deductions or breaks to take and how much effort will be expended to avoid-evade taxes otherwise owed to the government. And when we talk about judgment in the context of duty to country, I submit that there are moral considerations that come in to play.

              Was it legal for Romney to claim as a loss his wife’s dressage horse, Rafalca, to offset his tax bill even though, to most of us, it was obviously a hobby horse? Apparently so. But would was it patriotic to do so? That is a judgment call on his part and it reveals something, I think something important, about what he thinks of his duties to his country, the country that allowed him to become fabulously wealthy and to keep most of that wealth.

              Romney told ABC’s David Muir this:

              I don’t pay more than are legally due and frankly if I had paid more than are legally due I don’t think I’d be qualified to become president. I’d think people would want me to follow the law and pay only what the tax code requires.

              I submit to you that part of the reason that Romney is not president today is because of the attitude wrapped up in that comment. And that attitude is tied to what I was trying to say in the piece above: what if every citizen, including every corporate citizen, had the same attitude, especially when it was time to go to war? Or, less dramatic, fix the country’s infrastructure or holes in the safety net?

              Corporations and wealthy people make judgments all the time about how aggressive they will be in pursuit of legal (and for some, illegal) ways to not pay taxes. I submit to you that those judgments should involve the duty we owe to our country, notwithstanding the fact that it is Congress who makes tax avoidance-evasion possible.

              Romney said, “I’d think people would want me to follow the law and pay only what the tax code requires.” Follow the law? Huh? The tax code doesn’t require him to claim a hobby horse as a tax loss or to park money in exotic locations. He chose to do so and in so choosing he revealed something about who he is. I guess the short of it is that I wouldn’t want to be in a foxhole with that guy.

              Finally (aren’t you glad?) to my use of those two terms, avoid-evade, as synonyms. Here’s how Merriam-Webster defines “evade”:

              intransitive verb
              1: to slip away
              2: to take refuge in escape or avoidance

              transitive verb
              1: to elude by dexterity or stratagem
              2 a : to avoid facing up to <evaded the real issues>
                  b : to avoid the performance of : dodge, circumvent; especially : to fail to pay (taxes)

              As you can see, there is no legal distinction here. And while I recognize (and recognized in the original piece) the general distinction between the two terms when it comes to taxes, I meant to use the terms synonymously to make a moral point.

              Duane

               

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              • Duane,

                In looking back, I see I was rather flippant and downright condescending to you and writer89. I must have had a bad day that day. I don’t remember. I have found recently that memory seems to be inversely proportional to age. In any case, I apologize for the upset. Bad, Herb. Bad, bad.

                As to the rest of the discussion, at least the civilized part, I think we are just going to agree to disagree. I think I understand your positions on the various issues and I think, recently, you are beginning to understand mine. But it’s probably a waste of both of our times to stir the hornets up any more than we need to.

                Now, since my rocket just flew into a dead horse, I probably ought to stop here. There’s always a next issue to provoke discussion..

                Herb

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  6. ansonburlingame

     /  June 12, 2013

    Wow, I leave town for a long weekend and Herb and Duane are still at it when I return. Good discussion, both of you, in my opinion.

    Far above the recent posts I wrote “Politicians have little concern for how much they spend but are very shy about demanding the taxes really needed to support such spending.”

    Fix that problem and all of the above goes away, right??

    Anson

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