Spineless

The Great Corporate Tax Swindle
by Richard Wolff

More and more, we hear that nothing can be done to tax major corporations because of the threat of how they would respond. Likewise, we cannot stop their price-gouging or even the government subsidies and tax loopholes they enjoy.

For example, as the oil majors reap stunning profits from high oil and gas prices, we are told it is impossible to tax their windfall profits or stop the billions they get in government subsidies and tax loopholes. There appears to be no way for the government to secure lower energy prices or seriously impose and enforce environmental protection laws. Likewise, despite high and fast-rising drug and medicine prices, we are told that it is impossible to raise taxes on pharmaceutical companies or have the government secure lower pharmaceutical prices. And so on.

Such steps by "our" government are said to be impossible or inadvisable. The reason: corporations would then relocate production abroad or reduce their activities in the US or both. And that would deprive the US of taxes and lose more jobs. In plain English, major corporations are threatening us. We are to knuckle under and cut social programmes that benefit millions of people (such as college loan programmes, Medicaid, Medicare, social security, nutrition programmes, etc). We are not to demand higher taxes or reduced subsidies and tax loopholes for corporations. We are not to demand government action to lower their soaring prices. If we do, corporations will punish us.

Three groups deliver these business threats to us. First, corporate spokespersons, their paid public relations flunkies, hand down the word from on high (corporate board rooms). Second, politicians afraid to offend their corporate sponsors repeat publicly what corporate spokespersons have emailed to them. Finally, various commentators explain the threats to us. These include the journalists lost in that ideological fog that always translates what corporations want into "common sense". Commentators also include the professors who translate what corporations want into "economic science".

Of course, there are always two possible responses to any and all threats. One is to cave in, to be intimidated. That has often been the dominant "policy choice" of the US government. That's why so many corporate tax loopholes exist, why the government does so little to limit price increases, why government does not constrain corporate relocation decisions, etc. No surprise there, since corporations have spent lavishly to support the political careers of so many current leaders. They expect those politicians to do what their corporate sponsors want. Just as important, they also expect those politicians to persuade people that its "best for us all" to cave in when corporations threaten us.

What about the other possible response to threats? Government could make a different policy choice, define differently what is "best for us all". In other words, it could persevere in the face of business threats, and to do so, it could counter-threaten the corporations. When major corporations threaten to cut or relocate production abroad in response to changes in their taxes and subsidies, or demands to cut their prices or serious enforcement of environmental protection rules, the US government could promise retaliation...

Yes, but that would take backbone!