Tag Archives: corporate taxes

In defense of Corporate Personhood

I’m getting tired of people discussing corporate personhood as if it’s a bad thing.  Corporations have been treated legally as people almost since the moment joint-stock companies were created in England in the 1600’s.  Yes it’s a legal fiction, but it’s a necessary one.  400 years ago they saw the reasons why you need to treat corporations as people, reasons that people who want to whine about corporate personhood are apparently too stupid to see…but let me go over just a few.


Now this point is, for me, the weakest point, but I felt like this one will make the biggest impact on liberals.

If corporations aren’t legally people how do you tax them?  There’s no clause in the Constitution allowing for taxation of corporations, only on states and the income of people (and I have a real problem with that Amendment anyway).  If corporations aren’t people you have no legal right to tax them, which actually is fine with me since I despise the evil of double taxation created by the corporate income tax.  But for everyone who bitches about corporate personhood…did you want to stop taxing corporations?

But since I want to get rid of corporate taxes I’m not too invested in that argument.  So what else do I have…

Legal Responsibility and Crime

I want you to look at criminal law and most regulations.  90% of them don’t even mention corporations.  They mention people.  The only reason that corporations have to follow those regulations are because, legally, they are people.  After all if they’re not people they’re things…and things don’t have legal responsibility. You don’t charge the knife with murder, you charge the person who held it.  Or if I were to give a chimp a gun and it shot someone, it’s not the chimp’s fault, it’s mine.  Only people have legal obligations to obey the law.

Now someone out there will say that this argument isn’t valid, that the organization still has legal obligations.   Okay, let’s take a look at a real life organization, that everyone admits exists, that it is near impossible to make it uphold it’s legal responsibilities: the mafia.  If a company is incorporated under law you can charge the whole company with violations of the law, hold everyone on the board responsible, and give fines or jail time.  Tell me how well that works with the mafia…has the mafia ever been charged with a crime…no we have to charge individuals with crimes, and we even need to come up with convoluted laws to help link one person in the organization to another (RICO), and even then it’s impossible to legally prove collusion, conspiracy and guilt.

I’d like to think that people have it in them to always be their best…but I know not to be so naïve as to think every corporation will act in a responsible manner.  And if you take away the personhood that makes each corporation obliged to follow the law you make every corporation a mafia, a law unto itself who acts under omerta like silence so that no individual within the corporation can be prosecuted.  You think a corporation can behave badly now?  Wait until you remove their personhood.

Pragmatically, if you were to take away corporate personhood, you would have to rewrite all laws and regulations to hold corporations to the same rules as people.  Ignoring the preposterous idea of writing into law the idea that a thing can be held responsible, let me ask you how well is that going to go?  Having the people who are paid off by corporations to rewrite thousands upon thousands of laws to include corporations…do you think that the laws will be a tad more lax on corporations than on people?  Do you think that’s a good thing?

Legal Standing

Okay, I admit, the comparing them to the mafia might be a bit of a stretch, but there is something else to consider.  If a corporation isn’t a person, then it has no legal standing in court.  That means it can’t sue or be sued.  It can’t be held liable for a civil document, like a contract.

Inevitably any business, if it’s around long enough, even if founded by people of character and genius, will come, at least for a time, under the control of thugs and short sighted fools (GE for instance).  If you can’t sue a corporation, do you think there is anything that will stop a corporation from behaving badly?  Do you have any recourse if they harm you with their product?  Yeah you could try suing the board or the CEO, but you would have to prove they knew of whatever it is you’re suing for, and by the already byzantine madness that is corporate bureaucracy and by the fact they’ll claim deniability, that will be all but impossible to prove, and they’ll win.

And I guess you could go after the owner and investors personally, because, hey, if you’re going to strip them of free speech rights, then the legal protections that corporate law provides can’t be far behind…but as I’m about to explain in the next section…that will only hurt the economy.

So why not just rewrite the laws to say that corporations are exempt from the privileges of free speech?

Well for two slippery slope arguments that legal scholars have always found very convincing.  (Probably because history is filled with examples of when these slippery slopes did result in worse case scenarios).

The first is that if you abridge one’s right of personhood for a corporation then you can easily start abridging all the rights of personhood for corporations.  At which point when you have stripped them of all the rights and left them with only the obligations, why would anyone form a corporation?

The second the costs outweigh the benefits corporations will stop being created.  Now I’m sure some very stupid socialists out there are cheering at that idea…the rest of us have at least a vague idea of why that is a very, very bad thing.  Without the protections of a corporation, innovation/starup businesses & investment will stop; when investment stops growth and economic prosperity will stop; from there innovation will halt and our standard of living will collapse. Look at it this way, China which still doesn’t have much in the way of private property rights (which are a key point to true and long lasting economic growth) has protection for corporations and investment.  Most of China’s recent growth in the last couple of decades has been because of these legal protections allowing corporations to grow and prosper. If we completely get rid of those protections expect to be living in a very nice third-world nation.  (Oh and you 99% idiots, think income inequality is bad now…just wait for a civilization where there is no growth).

The other slippery slope is just as horrifying.  If you can abridge the rights of this group you don’t like…what’s to stop the next group. But you start abridging the most basic rights of one unpopular group, how long before that’s used as a justification for taking away rights of other unpopular groups. I think illegal immigration is a major problem, but I’m not about to write laws that say you have to show proof of citizenship before a hospital treats you for a life threatening illness (although I wouldn’t mind a call to ICE afterwards).  I think wearing a hijab is an insult to the very nature of humanity and equality of the sexes, but I’m not about to pass a law against them.  And while I just named two things that I as a conservative am opposed to…think about all the things liberals are opposed to…would you trust atheists who could use this precedent?  And we all know that many liberals are violently opposed to the 2nd amendment…where does it stop once you start abridging rights for one group or another?  Human history tells us that we, as a species, have some really nasty moments…do you really want to give legal precedent for giving into those worst inclinations?  Or should we get Manzanar ready again for the next really unpopular group?

The fact of the matter is that corporate personhood is a necessary legal fiction of modern civilization. Yes I’m finding these SuperPACS a little annoying too, but challenging the idea of corporate personhood is probably the worst way to deal with this annoyance.

How about limiting the amount that the government can get involved in the economy, thus removing the incentive for corporations to back laws and candidates?  But that would make too much sense wouldn’t it.

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