No Representation Without Taxation

Well, that is not quite the argument that Amy B. Dean made in her opinion piece for Al-Jazeera America, titled Not Enough Taxation and Too Much RepresentationBut she does point out the discrepancy between how little modern corporations invest in their community — whether through paying taxes or through offering decent employment — and how much they nonetheless continue to exercise disproportionate political influence.

For decades now, U.S. corporations have been cutting ties with the communities that enabled their success in the first place. The trend began in manufacturing, a sector that has slashed nearly 8 million jobs since 1979. It has since spread as companies have outsourced and offshored an expanding array of jobs. A good example comes from the semiconductor industry. According to the Government Accountability Office, beginning in the 1960s, semiconductor manufacturers began to move assembly plants to Asia. In the 1980s they followed these with wafer foundries and, beginning in the 2000s, design and engineering jobs as well. A survey of over 500 companies by the consulting firm Booz Allen Hamilton affirms this trend, finding “a salient shift toward locating more sophisticated and mission-critical work in countries such as India, China, Hungary, Brazil and the Philippines.”

From 2010 to 2012, three-quarters of the jobs created by the 35 largest U.S. companies from were outside the country, according to The Wall Street Journal. And for the 2000s, the newspaper reports, “U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home” — with domestic payrolls reduced by 2.9 million while 2.4 million jobs were established overseas.

As it is, the complaint about high statutory corporate tax rates is a red herring. As the Economic Policy Institute reports, the effective corporate tax rate has stayed at a relatively low 27.7 percent, on par with those of other economically advanced countries. In fact, the effective rate has remained well below the statutory rate since the early 1980s, making corporations’ complaints about their tax rate here seem hyperbolic. The fact remains that almost all the benefits of higher productivity have gone to corporations, and their profits are at an all-time high.

One could argue that this trend could be tolerated, were it not for companies nevertheless wanting to play an ever bigger role in domestic issues and local governance:

As corporate culture has grown more and more disconnected from American communities, it has demanded a greater and greater say in the country’s elections. Since 2000, independent expenditures in electoral campaigns have increased over 60-fold, from under $3 million to $186 million today. And an increasing amount of this money has come from avenues opened by the 2010 Supreme Court decision Citizens United, in which it upheld the idea that corporate money should be regarded as speech and thus be covered by First Amendment protections.

Given the long-term shift in corporate loyalties away from being invested in American communities, we should be moving in the opposite direction, taking action against corporations that have such a dominant role in our democracy. The ability to participate in democratic deliberations should be predicated on embracing the responsibilities of citizenship and being invested in the well-being of our communities.

Personally, I agree with this sentiment. Although I see myself as a citizen of the world, and think we have an obligation towards bettering the lives of others beyond the borders we happen to be born within, what is going on here is different: companies are decoupling from any sense of social responsibility towards their communities while still feeling entitled to disproportionately influence the policies of the very areas they have essentially abandoned.

Moreover, the fact that record profits have not translated to better pay or treatment for workers — in or out of the country — makes this practice all the more reprehensible. Many of these companies have the resources at their disposal, and can in fact continue making good profits while looking after communities both here and abroad; but alas, the demand for ever-higher payouts to shareholders and executives eats a bigger chunk of the profit that could be reinvested through better pay, benefits, and the like.

In short, what we see is part of a wider trend in which economic elites feel little social obligation towards the rest of society. They have the resources to isolate themselves geographically from the non-wealthy, or indeed to leave their communities altogether (whether local, state, or national). Globalization has only amplified this disconnection, as the wealthiest citizens can simply move themselves and their great resources wherever suits them.

But in a world where overall wealth is higher than ever — yet concentrated so that 85 individuals have more than 3.5 billion people — is this sort of decoupling morally justifiable? Cannot these prosperous companies and their investors spare even a fraction of what they have towards bettering the lives of the workers worldwide who contributed to that prosperity, rather than try to dominate them further by supporting even more onerous policies? It would appear that our business culture and economic system do not allow it.

What do you think? Do companies have an obligation to their communities? Should they refrain from exercising influence if they are going to be leaving their localities or even countries behind?

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