FacebookTwitterGoogle+RedditEmail

Open Up Those Corporate Tax Returns

by RALPH NADER

It has never been more clear how much corporations depend on We, the People for their very existence. Corporations are given the right to exist through a public charter. For public corporations, shareholders are bestowed with limited liability, and they benefit from a public system of securities regulation that gives investors confidence to invest. In the best of times, corporations benefit both from public goods (public roads and infrastructure, public investment in R&D) and targeted benefits (tax subsidies, loan guarantees, and much more). In the worst of times, as we now see, the largest corporations can expect massive public support. Bloomberg reports that the United States has already committed an amazing $7.76 trillion — more than half of U.S. GDP — in funds for bailouts, guarantees, share purchases, insurance programs, swaps and more.

Don’t We, the People have the right to expect something in return?

How about starting with public release of the income tax returns of all corporations above a certain size (say, $10 million in assets)?

In October, a former Bush administration head of the Internal Revenue Service, Mark Everson, proposed exactly that in the Washington Post.

Wrote Everson,

“Federal tax returns include important information about corporations beyond that available in financial statements. Making corporate returns available for public inspection would provide a powerful tool to analysts who follow companies and industries, and it would help others better evaluate counterparties and risk. It would assist other federal and state regulators, who currently are prohibited from reviewing the details of federal returns. (The IRS itself is precluded from sharing returns with the Securities and Exchange Commission and the Justice Department except in narrow circumstances.) Large corporations file their federal tax returns electronically, so the data can easily be shared. Information returns filed by not-for-profits are already available online.”

Disclosure of corporate income tax returns would help offset the intentional obscurity and complexity surrounding corporate records that has so directly contributed to the current financial crisis.

It would also lead to much better tax policy. President-elect Obama has stated that he and his administration will carefully review every budget expenditure, in order to save taxpayer dollars and eliminate or curtail programs that have outlived their usefulness or never should have been started. This is a welcome commitment. Aside from cutting wasteful Pentagon spending, however, the really big ways to improve the government’s balance sheet are in eliminating unfair, inefficient corporate tax loopholes, and escapes to tax havens abroad.

The complexity of the tax code — itself the product of long-term, persistent and intensive lobbying — invites esoteric gaming by large corporations, aided and abetted by lawyers and accountants.

Some tax provisions are included in the Code with almost no one other than the lobbyists who wrote them understanding what their implications will be.

And some tax provisions are muscled through by powerful interests, but impose public costs not fully understood at the time of enactment, while offering minimal public benefits.

If corporate tax returns were made public, citizen advocates and other monitors would be able to root out tax abuses, and rally to have them repealed. The government — that is, the taxpayers — would stand to recoup tens of billions of dollars, or more, to be more appropriately allocated.

Corporations, naturally, would object to mandatory disclosure of their tax returns. They would claim a right to privacy. But corporations are legal fictions, not people with legitimate privacy concerns. There should be no corporate right to privacy.

Corporations would also argue that disclosing tax returns would force them to reveal proprietary information. But that claim pales beside the broad public interest in gaining access to corporate returns, especially in this period of cascading mega bailouts. And, if corporations can identify some narrow and legitimate right to proprietary protection, let them do so. Then those specific areas can be excluded from disclosure.

Disclosure of corporate tax returns would be administratively simple. As Everson notes, the IRS already requires that corporations file their returns electronically. And there are precedents even from the pre-digital age. Wisconsin, for example, required corporate tax returns to be disclosed, before modifying its rules several decades ago.

In the first week of December, the auto industry CEOs will again appear before the Senate Banking and House Financial Services committees, to make the case for receiving billions in tax payer bailout monies. Hopefully, they will find a way to get to Washington other than by chartering their corporate jets. Chairman Chris Dodd and Chairman Barney Frank should instruct the CEOs that they should come with their corporate tax returns in hand, ready to share them with the American people. That will open the gates for a new standard of openness that should apply to all corporations.

RALPH NADER is the author of The Seventeen Traditions.

 

 

 

 

 

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

More articles by:
June 27, 2016
Robin Hahnel
Brexit: Establishment Freak Out
James Bradley
Omar’s Motive
Gregory Wilpert – Michael Hudson
How Western Military Interventions Shaped the Brexit Vote
Leonard Peltier
41 Years Since Jumping Bull (But 500 Years of Trauma)
Rev. William Alberts
Orlando: the Latest Victim of Radicalizing American Imperialism
Patrick Cockburn
Brexiteers Have Much in Common With Arab Spring Protesters
Franklin Lamb
How 100 Syrians, 200 Russians and 11 Dogs Out-Witted ISIS and Saved Palmyra
John Grant
Omar Mateen: The Answers are All Around Us
Dean Baker
In the Wake of Brexit Will the EU Finally Turn Away From Austerity?
Ralph Nader
The IRS and the Self-Minimization of Congressman Jason Chaffetz
Johan Galtung
Goodbye UK, Goodbye Great Britain: What Next?
Martha Pskowski
Detained in Dilley: Deportation and Asylum in Texas
Binoy Kampmark
Headaches of Empire: Brexit’s Effect on the United States
Dave Lindorff
Honest Election System Needed to Defeat Ruling Elite
Louisa Willcox
Delisting Grizzly Bears to Save the Endangered Species Act?
Jason Holland
The Tragedy of Nothing
Jeffrey St. Clair
Revolution Reconsidered: a Fragment (Guest Starring Bernard Sanders in the Role of Robespierre)
Weekend Edition
June 24, 2016
Friday - Sunday
John Pilger
A Blow for Peace and Democracy: Why the British Said No to Europe
Pepe Escobar
Goodbye to All That: Why the UK Left the EU
Michael Hudson
Revolts of the Debtors: From Socrates to Ibn Khaldun
Andrew Levine
Summer Spectaculars: Prelude to a Tea Party?
Kshama Sawant
Beyond Bernie: Still Not With Her
Mike Whitney
¡Basta Ya, Brussels! British Voters Reject EU Corporate Slavestate
Tariq Ali
Panic in the House: Brexit as Revolt Against the Political Establishment
Paul Street
Miranda, Obama, and Hamilton: an Orwellian Ménage à Trois for the Neoliberal Age
Ellen Brown
The War on Weed is Winding Down, But Will Monsanto Emerge the Winner?
Gary Leupp
Why God Created the Two-Party System
Conn Hallinan
Brexit Vote: a Very British Affair (But Spain May Rock the Continent)
Ruth Fowler
England, My England
Jeffrey St. Clair
Lines Written on the Occasion of Bernie Sanders’ Announcement of His Intention to Vote for Hillary Clinton
Norman Pollack
Fissures in World Capitalism: the British Vote
Paul Bentley
Mercenary Logic: 12 Dead in Kabul
Binoy Kampmark
Parting Is Such Sweet Joy: Brexit Prevails!
Elliot Sperber
Show Me Your Papers: Supreme Court Legalizes Arbitrary Searches
Jan Oberg
The Brexit Shock: Now It’s All Up in the Air
Nauman Sadiq
Brexit: a Victory for Britain’s Working Class
Brian Cloughley
Murder by Drone: Killing Taxi Drivers in the Name of Freedom
Ramzy Baroud
How Israel Uses Water as a Weapon of War
Brad Evans – Henry Giroux
The Violence of Forgetting
Ben Debney
Homophobia and the Conservative Victim Complex
Margaret Kimberley
The Orlando Massacre and US Foreign Policy
David Rosen
Americans Work Too Long for Too Little
Murray Dobbin
Do We Really Want a War With Russia?
Kathy Kelly
What’s at Stake
Louis Yako
I Have Nothing “Newsworthy” to Report this Week
FacebookTwitterGoogle+RedditEmail