Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Rampell: Corporations aren’t people, they’re better

First Published Jul 25 2014 12:06 pm • Last Updated Jul 25 2014 12:08 pm

WASHINGTON • "Checked the tax code," wrote a friend who’s engaged to a woman from a low-tax country. "Unfortunately, marrying [my fiancee] does not entitle me to a tax inversion like the big US companies are getting. Thanks for nothing IRS."

This got me thinking. Maybe we’ve been looking at this whole corporations-are-people-too foofaraw the wrong way. Critics complained when the Supreme Court granted companies rights to freedom of speech and religion under the legal fiction that corporations are people. But perhaps this precedent is good news for flesh-and-blood people like you and me (aka People Classic).

Join the Discussion
Post a Comment

If companies are claiming the rights and privileges of people, maybe people should start claiming the rights and privileges of corporations. Rights harmonization, in other words, should flow in both directions, since we’re now all indistinguishable, equally protected "persons" — in the court’s eyes, anyway.

I spoke with a few legal and tax experts about what we humans stand to gain from my cutting-edge constitutional insight. Turns out corporations enjoy tons of rights and privileges that biological beings should be salivating over.

The most obvious place to start is taxes. Companies save billions from loopholes that don’t apply to individuals — yet.

People, for example, pay taxes on their worldwide incomes. Corporations do not, as long as they don’t bring the foreign profits back into the United States. And tax attorneys have come up with clever ways of booking an unexpectedly high share of corporate income abroad.

Businesses, for example, can transfer their "intangible" property — things like patents or trademarks — to holding companies in tax havens. This means a company such as Apple could assign ownership of its patents to a subsidiary in Bermuda, and any profits resulting from those patents would get taxed in Bermuda only. Unless and until those profits were repatriated to the States, Uncle Sam wouldn’t get a cut.

If you think about it, humans have valuable intangible assets, too. Take, for instance, a college degree.

According to Martin Sullivan, the chief economist at Tax Analysts, if individuals were treated like corporations, I could set up an affiliate called "Catherine Rampell Bermuda," have it pay my college tuition and then declare that the affiliate owns the resulting degree. I could then tell the IRS that everything I earn above the average high school grad’s wage should be recorded as income in Bermuda, since it’s all derived from a Bermuda-based asset. Until I decide to repatriate those diploma-derived earnings, I’ve built myself a tax-free IRA.

Other goodies abound. On federal tax returns, individuals can deduct either the sales taxes they paid or their state income taxes, not both; for companies, these deductions are all-you-can-eat. If people were treated like companies, we could also start deducting the first dollar we spend on health care, rather than just the medical spending that exceeds 10 percent of our adjusted gross incomes.


story continues below
story continues below

Home-buying would also become more attractive. Right now there are limits to how much mortgage interest humans can deduct. But if you analogize your primary residence to a "corporate headquarters" and your vacation homes to "branch offices," you can deduct the full interest on every McMansion you ever purchase.

The tax code isn’t the only place where we might enjoy gaining our corporate brethren’s rights.

If people were treated like corporations, perhaps we’d be able to "merge" with whomever we want without worrying about restrictive marriage laws, noted Adam Winkler, a UCLA law professor. We could also choose to abide by the family law in whichever state we like best, regardless of where we live. Companies, after all, can incorporate in the jurisdiction with the most favorable corporate governance laws, regardless of where they operate, explained Kent Greenfield, a law professor at Boston College. That’s one reason Delaware is home to more businesses than people.

But the best perk of being treated like an incorporeal corporation?

Even if you killed someone, stole a house, funded a genocidal regime or terrorize the global economy, you wouldn’t go to jail. At worst, you’d pay a fine. Sure, you could be executed for your crimes — sort of — by having your charter revoked or by being driven to bankruptcy by onerous penalties, but you could always return from the dead with a different name but much of the same DNA. To err is human; to err and bounce back unscathed, you really need to be a company.

crampell@washpost.com

Twitter: @crampell



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.