Corporate America Wants it Both Ways

The Supreme Court has made some bad decisions over the last two centuries. Dred Scott, Plessey v. Ferguson, and Bush v. Gore spring to mind. However, none of these posed the existential threat that Santa Clara County v. Southern Pacific Railroad does. That was the boneheaded decision that put corporations on an equal legal footing with human beings. Loads of bad decisions and policies have followed. One can now argue that corporations are superior to humans in many instances.

Consider yesterday’s argument in the Hobby Lobby case before the Supremes. Here, a corporation’s religious owners are arguing that they should not have to pay for certain kinds of birth control under Obamacare that they believe are tantamount to abortion. (IUDs for example). Now, a corporation is a separate individual under the law, but the owners of Hobby Lobby are demanding that their religious objections be allowed to interfere with public policy. Since the owners are Baptists, perhaps they can provide a Baptismal certificate for the corporation. Just when was the corporation dunked under the water?

Yet, when it comes to capital gains tax, corporation income tax and legal liability, corporations are not related to their owners in anyway according to those who speak for corporate America. They trot out the nonsense that taxing capita gains is double taxation. Corporations pay a different income tax rate (effectively lower) than natural persons, making the former a privileged class. And when a corporation’s assets are less than its liabilities, it files for bankruptcy from which the shareholders’ assets are exempt. In these situations, they are separate from their shareholders.

Beyond that, agents of corporations are literally getting away with homicide committed in their roles as actors on behalf of the corporation. Toyota is going to pay a $1.2 billion fine owing to bad floor mats and accelerators that caused numerous accidents. “In its zeal to stanch bad publicity in 2009 and 2010, Toyota misled regulators, misled customers, and even misstated the facts to Congress” said U.S. Attorney Preet Bharara. “Even while giving unequivocal assurances that it had fully addressed a grave safety problem, Toyota knew full well that the problem of unwanted acceleration persisted.” So, Toyota knew about the problem, misled the public and Congress, and therefore, was culpable for damage to property and persons (as well as perjury or contempt of Congress). And no one is under indictment.

General Motors is in a similar situation. It is facing legal action over a problem with the now-discontinued Cobalt; a heavy key ring could turn the power off while the car was in motion. GM itself has linked the problem to 12 fatalities. The worst part is that there appears to be evidence that GM engineers developed a solution, and someone at the company decided not to implement it. That someone needs jail time.

Lastly, there is the case of the Deepwater Horizon, the off-shore oil rig that exploded, causing the huge oil leak at the bottom of the Gulf of Mexico in 2010. In the explosion and immediate aftermath, 11 crewmen died. Since such rigs don’t explode in the normal course of their operations, someone somewhere was negligent, criminally so. And yet, not a single indictment has come down in the years since.

Americans have had to fight for equality under the law despite the 14th Amendment. Race and sex have been the two great divides, but now a third has arisen. Given the current trajectory, someday human beings may demonstrate in the streets of America’s cities to be the equal of corporations.