It’s really nothing new. For many years, large corporations have been given special privileges by our governments. After all, it’s believed that they expand the tax base and fuel our economy.
But do they really?
The vast majority of jobs in the U.S. are created by small businesses. And, while it is true that large corporations are responsible for large contributions to local, state and federal taxes, the contributions are largely the result of their employees’ tax payments. Fact is, given the resources they consume, the pollution they create, and the expensive infrastructure they require, large corporations pay relatively little in taxes.
What large coporations and their executives do contribute are donations to the political campaigns of those who will give them what they want – government access, influence and power. And those donations have paid off handsomely in recent years.
Despite the fact that government deficits have increased dramatically over the past 30 years, corporate taxes have routinely diminished. Indeed, city, county, state and federal governments have bent over backwards to attract and appease large corporations. For example, cities have provided Tax-Increment Financing (TIF) to large corporations, allowing them to avoid paying property taxes on large buildings. And when the TIF expires, another large corporation purchases the building with the help of (you guessed it) Tax-Increment Financing.
Counties and states often provide no-interest loans and exemptions from regulations to attract large corporations. And the federal government often creates tax loopholes to the benefit of corporations. Many have been given tax breaks for setting up a P.O. box offshore to create a new “headquarters.” And many have been given tax breaks for exporting manufacturing and tech-support jobs to other countries.
So how have large corporations repaid these favors?
They routinely pull up stakes at the first hint of increased taxes or regulations. And they fund political campaigns against any elected official who has the temerity to oppose them. Of course, corporate meddling in our political process will only increase now that the Republican-controlled Supreme Court has ruled that corporations enjoy the Constitutional rights of individuals (a startling decision given the fact that a corporation is little more than a piece of paper that creates a corporate “veil” protecting its founders from creditors in the event of failure).