Uncommon Sense

October 25, 2011

I Wanna Be a Corporation, Too. . . .

Filed under: Uncategorized — Steve Ruis @ 5:38 pm
Tags: , ,

Mitt Romney is oft quoted as saying “Corporations are people, too,” which he did say but has been misinterpreted, I am sure, as are many things in politics. For example, Sarah Palin didn’t say “I can see Russia from my house,” comedian Tiny Fey did, but Palin got tagged with the saying. Romney is tagged with his saying even though I believe he meant that corporations are made of and by people. Mistaken or not, the comment hit a nerve. One of the best comments I have heard or seen in response was a sign at one of the “Occupy . . . ” protests, namely “I’ll believe corporations are people when Texas executes one.”

That sign got me thinking. The idea of a corporation is that it is a fictitious person (a corpus) doing business. One of the aspects of corporations that business people love is that if the going gets really tough, the corporation can “disincorporate,” that is the people in charge can kill the fictitious person. Since that “person” is dead, it no longer owes its creditors or has any other obligations. If corporations were real people, any time one bit the dust a coroner’s enquiry would be necessary, but because they aren’t, there isn’t even a funeral.

Corporations have been doing this dance for years. If one’s creditors are at the door, the corporation “dies” and a new corporation, often with the same people composing it, is born elsewhere. I can understand why the people behind this magic trick are in favor of it, but I don’t understand why the general business community favors it because it is often stuck with the bills. But since most of the losses are borne by stockholders, I guess it works in general, at least for public corporations.

While the Supreme Court has decided that fictitious people are not only good for business but for politics, too, it looks as if fictitious people are becoming more like you and me every day. (The guy who invented virtual avatars is way behind the curve.) But, I don’t think SCOTUS has gone far enough. I want to be a corporation, too! But, not so I can die to get out of trouble but for tax reasons. Consider the fact that corporations only pay corporate tax on their profits and, of course, corporate lobbyists have made sure that every kind of expense made by a corporation is included as a loss in their profit and loss statement. I want the same treatment.

I want to pay taxes only on my profit for the year, not on my income. Think about it. From your income, you deduct all you spent on housing, food, transportation, education, entertainment of friends (only 80%), etc. and at the end of the year, what do you have left over? Let’s say you managed to save $300. So, your tax bill is 35% (the corporate rate) of $300 or $105. Write a check and you are done.

Poor people spend almost everything the make on necessities, so they won’t pay federal taxes at all. The vast majority in the middle won’t pay much tax as we aren’t into saving, but people making beaucoup bucks, well, for them it would be different. Investments in the stock market aren’t expenditures, they are like putting money into a savings account, so after rich folks have paid for their food, electricity, garbage, yachts and mansions, everything they have left over would be taxed at the corporate rate. That hedge fund manager who made $1 billion dollars in a single tax year would pay roughly 35% of that in taxes instead of the 15% he did pay. (I don’t weep for the guy, he still would clear $650,000,000 after taxes under my plan, which works out to about $340,000 and change per hour worked.)

Why should corporations get all the breaks? Don’t you want to be a corporation, too?

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