When the Citizens United decision came down from the Supreme Court in January of 2010, the left side of the American political scene exploded into indignation. President Obama went so far as to criticize the decision in his State of the Union speech a week later and urged Congress to enact legislation to override it, creating a stir when Samuel Alito, one of the Justices who voted in favor of the decision, silently (but still in sight of the cameras) responded to the disrespect implied by that public chastisement, disputing the assertion that the decision would “open the floodgates for special interests — including foreign corporations — to spend without limit in our elections.” Despite the fact that there isn’t much evidence that the Citizens United decision did, in fact, open any such floodgate, both Barack Obama and Hillary Clinton have since proposed that we should amend the Constitution to annul it. And people who rail against the “obscene” level of spending on national campaigns and against the “illegitimate” amount of influence that “special interests” exert over politicians routinely blame the Citizens United decision for practices that are allowed by entirely different provisions of campaign finance law and have nothing to do with what Citizens United decided — whether or not corporations can spend money on their own, independent advocacy efforts.
I thought nearly everyone had missed the point. I wrote this as letters to The New York Times , The Boston Globe, and The Washington Post to say that, but it was not published by any of them. Later, I sent it to Stanley Fish, a professor of English, author, and sometimes New York Times columnist, not because I thought he would necessarily agree with it but because I thought he would appreciate the subtlety of the philosophical argument. As it happened, he did and thanked me for sending it to him. As far as I know, however, the question I raised about the relationship between political rights and political responsibilities has never been addressed in any of the myriad discussions of the topic elsewhere.
9 February 2010
I would find the histrionics about the Supreme Court’s grant of free speech rights to corporations more compelling if the complaints reflected a consistent view of the nature of corporations. Alas, they do not.
A corporation is a legal fiction, not a moral one, a collective of individuals created to represent their common interest when dealing, specifically, with our system of laws and contracts. The argument that it is those individuals, individually and not as a collective, that have political rights is reasonable. And, within that framework, it is reasonable to contend that the corporation has no independent political existence or political rights — including no right to free speech.
But when it comes to the other side of the political equation — the duties of citizenship — those who now express outrage about corporate free speech see things differently.
When a corporation makes a profit and distributes that profit to its shareholders — either directly, as dividends, or indirectly, by increasing the value of the company’s shares — the shareholders are taxed on whatever gain they realize. That is a duty of citizenship. And that is how it should be, if a corporation is merely a fictional identifier for a collection of individuals and with no independent political identity of its own.
But before that distribution can happen, the government first taxes the corporation itself on that profit. In the context of taxation, the government asserts a very specific and practical political identity — that of individual taxpayer — to a corporation; and those who are now decrying the notion of “corporate rights” tend to have no problem at all with that political identity and its corresponding “corporate responsibility”. In fact, they cheer it on, and the more the better.
“No taxation without representation” was the rallying cry of the American revolution, an explicit acknowledgement that the role of taxpayer — the role of providing financial support to government — is an overtly political one. If corporations are not individuals for political purposes, then they should not be taxed as individual entities. If corporations are really no more than aggregates of their stakeholders, and have no right to political participation other than through those stakeholders, then political duties, including the paying of taxes, should also apply strictly and purely through those stakeholders.
To demand otherwise is politically expedient and lucrative but it is philosophically and morally insupportable.
© Copyright 2010, Augustus P. Lowell