Wednesday, April 3, 2013

Corporate Taxation, Progressive Tax, Rationale

An acquaintance asked if the idea of a progressive gross receipts tax should be implemented worldwide.

I think that's a valid implication.  Even so, there is a wide difference between what 'should' be done and what 'can' be done.  Seeking to accomplish such a reform world-wide would be a major challenge.  It is better to concentrate in an area where success is possible.  In the United States, companies deemed "Too Big To Fail" provide the impetus for action (although, judging by the underwhelming response to this question, that may be an optimistic assessment).

Corporations, like other organisms, consider self-preservation the first law of nature.  Though the methods of self-preservation vary, they are generally applauded as "survival of the fittest".  However, carried to extremes, self-preservation can be destructive of the preserved entity's habitat.  Beneficial though Darwinism may be in a purely theoretical sense, if our society and our environment are the specifics being destroyed, we must do what we can to prevent it.

re: "... if tax were to be imposed on resource usage - then who would own the resources?  The government?  How will that be done then, as at the moment all resources are in the hands of corporations?"

Correct me if I'm wrong on this, but I believe, in the United States, the resources are owned by the people and allocated by the government.  The problem is that, because the large corporations control the purse strings of the political parties and the parties control the choice of candidates for public office, the large corporations control the government and are able to demand, and get, the resources they desire.  If the allocation is improper, the only way we can correct it is by devising an electoral process that lets the people choose the best of their number to advocate their interests in the government so resources are allocated for the benefit of the people rather than the corporations.

re: "Just trying to get a better understanding of how this 'gross receipts tax' would work"

The problem of corporations "Too Big To Fail" is a contemporary issue in the United States.  The question of a progressive gross receipts tax was posed because I'm not sure why this solution to the problem is not being discussed.  Among its many advantages, a progressive tax on gross receipts has the remarkable quality that, when a corporation grows beyond an economically justifiable size, the tax acts to protect the public interest without additional regulation.

re: "... probably the reason why it has not yet been considered by the government is that we are still putting money and profit/price over what would be best for life on earth and thus also ourselves."

Is not the reason more likely to be "because the large corporations control the purse strings of the political parties and the parties control the choice of candidates for public office"?  Does this not put control of government in the hands of the very people who put "money and price" above what is best for life on earth?  Theodore Roosevelt, in his State of the Union Address on December 3, 1906[1], warned the American people of the "unholy alliance between corrupt business and corrupt politics".  The circumstances we now condemn flow directly from that unholy alliance.  We would do well to break its grasp on our government.

re: "I mean it would only make sense to make sure that we don't use up all the resources and pollute the environment through what we use and produce in our system - yet that seems to be a point of common sense that has not actually hit the major players in this world - who ever that may be that is in charge of resource distribution and management."

In looking for sense in the modern world, one must not overlook the fact that, whatever the judicial rationale supporting the decision that corporations are persons, corporations are not human.  They have no natural life-cycle of birth, adolescence, maturity, death.  They have no morality except that of pursuing their own interest.  They have no future, except the extent to which they can self-perpetuate.  Using up all the resources and polluting the environment have no meaning for corporations.

We can say that those who direct the operations of corporations are human and 'should' want to avoid using up all the resources and polluting the environment, but when those worries are set against the almost incalculable benefits of power and recompense corporate executives reap, such concerns are minor, indeed.

Probably the most difficult thing to accept is that these executives are not vile persons.  Most humans would act as they do, however much we would like to believe otherwise.  The pursuit of self-interest is universal.  The ability to suppress immediate gratification for future welfare, particularly when the threat is based on reason rather than experience and the welfare is of generations yet unborn, is not abundant.  It exists in sufficient quantity to benefit humanity, but is widely dispersed.  We've yet to devise a means of aggregating that quality, so vital to the benefit of society.

re: "So, as long as we live in a system that is founded upon this crazy idea that profit comes before life - government will never make decisions that will actually really benefit the people, but will always make decisions that benefit only the share-holders of major corporations - and as you say, are the ones who are also in office, as the ones who will profit."

And that's the point.  The problems we endure flow directly from our political system.  If we wish to live in a system that is not "founded upon this crazy idea that profit comes before life", we must devise a political process that filters the large number of citizens to find those with the qualities necessary to advance our common interest.  We will probably find that a central feature of the process will be harnessing human nature by making probity a necessary quality for those who wish to achieve public office.

Lest I be misunderstood, I do not know what is best for life on earth.  What I know is, the people most disposed to seek such a goal exist among us.  We must devise a means of finding them and raising them to leadership positions.  It is unwise to allow control of government to fall into the hands of corporate executives who profit by the laws the government enacts.

It would be nice if there were a site where this topic could be explored in detail and, hopefully, attract other thoughtful people to help examine such questions objectively.  Quora does not support the in-depth investigation of serious issues and, being of modest internet ability, I haven't found a site that does.  If you know of one, I'd like to examine this issue and some of its natural extensions in detail.

Fred Gohlke

[1] Theodore Roosevelt (December 3, 1906)

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