Professor Thane Rosenbaum’s Human Rights class spent a lot of time focused on the philosophical underpinnings of our government. Two prominent philosophers were extremely important to the foundation of our country: John Locke and Jeremy Bentham. Locke, a 16th century Englishman, laid the foundation for what we view today as a individualistically charged view on one’s role in society. Locke believed that labor produced property, and that property was essential to one’s identity. This view shaped the founders in their fight against a tyrannical English crown. Founding fathers such as Thomas Jefferson saw the importance of personal identity and property ownership, echoing Locke. However, at the opposite end of the spectrum is Bentham’s view known as “utilitarianism”, which seeks to maximize the “utility” of society as a whole. The morality of an action will therefore be measured by its impact on an entire group, ignoring the potential devastating impact said action may have on an individual. This distinction is important because although there should exist a careful balance between the individual and the group; corporations (legal “persons”) have hijacked our government and are imposing their wills upon the populace. We measure our wealth by measuring the nation’s GDP. However, we do not focus, as much as we should, on where the wealth is being produced. Historically a country that produced high quality steel and automobiles, we have turned into a country that acts as a legal and tax haven for corporate entities.
http://money.cnn.com/2010/04/16/news/companies/ge_7000_tax_returns/
The above links to a CNN article detailing how GE, one of the largest corporations in the world (and an American corporation) paid 0$ to the US federal government.
“This is the first time in at least decades that GE has reported negative U.S. pretax income and it reflects the worst economy since the Great Depression,” Anne Eisele, GE’s director of financial communications, said via e-mail.
But what about the $10.8 billion profit overseas? GE is “indefinitely” deferring income tax payments on those profits, Eisele said.
It may seem like accounting magic, but it’s completely legit.
Via holes in the tax code, corporations can claim domestic losses and international gains and pay nothing to the US government. Corporations claim the cover of Utilitarianism when they engage in corporate mergers, close factories to save money, and so forth. Regardless of one’s philosophical views, this practice runs afoul of the basic notions of Locke’s Social Contract theory. It is wholly immoral for a company to claim the protections of the US flag but not contribute a dime to the US treasury come tax time. While “utilitarianily” speaking, we require their economic output for our GDP, they have subverted the laws of a nation they are supposed to be citizens of as well.
-Daniel Rogove
