Thursday, July 4, 2013

Ralph Nader - Where are the Corporate Patriots?

Last year Ralph Nader wrote to Tim Cook, the CEO of Apple: "Corporations and their attorneys like to be judged as 'persons' under our constitutions and laws. So it is entirely appropriate to judge the character of a U.S. chartered corporation by the measure of corporate patriotism -- especially if it is operating worldwide."

Again, just prior to the 4th of July week-end, the political activist and consumer advocate questioned the patriotism of corporate America in an op-ed piece, writing to business leaders about reciting the pledge allegiance to the American flag at their annual shareholder meetings.

In 2011, in another op-ed piece that Ralph Nader wrote for the Chicago Tribune: Why not corporate patriotism for a change? he writes, "For more than 125 years the courts have been awarding corporations most of the constitutional rights possessed by human beings. Corporations --€ as artificial entities -- now almost have rights equal to We the People, even though the words 'corporation' and 'company' are not mentioned in the Constitution."

In a post by Sam Pizzigati, Getting Past Stars and Swipes Forever, he writes "Back in 1776, public-spirited patriots emerged from the ranks of colonial America'€s privileged. But our corporate elite today seems to offer up only thieving, tax-dodging parasites. Why such a contrast? Today's men of means display precious little selfless behavior. Our CEOs, bankers, and private equity kingpins remain totally fixated on their own corporate and personal bottom lines. They don'€t lead the nation. They steal from it."

But maybe they all aren't like this. According to Patriotic Millionaires: "In 2013, the Patriotic Millionaires will continue to dominate major media markets and renew pressure on Congress to reform the current tax system for the economic well-being of regular Americans. In addition, the Patriotic Millionaires will drive public attention toward issue-specific tax policies yet to be repaired, including: eliminating the carried interest loophole for hedge fund managers, limiting the total amount wealthy individuals can accumulate in tax protected IRAs and other retirement funds, and eliminating the mortgage interest tax deductions for second homes."

According to the Wall Street Journal (July 1, 2013) the U.S. Government Accountability Office found that large, profitable U.S. companies on average paid U.S. federal income tax equaling 12.6% of their world-wide income in 2010." The WSJ claims it's the highest in the developed world at 35% --- but not the highest effective tax rate. Senator Carl Levin (D-Mich.) who requested the report, correctly points this out, "Some U.S. multinational corporations like to complain about the U.S. 35% statutory tax rate, but what they don't like to admit is that hardly any of them pay anything close to it."

And the GAO study also found that when foreign, state and local taxes are included, the average effective tax rate of large profitable U.S. companies increases to about 16.9% (which is still less than half the actual statutory rate.) Even Senator Coburn (R-Oklahoma) said, "This report underscores the need for comprehensive tax reform. An individual's or corporation's tax rate shouldn't be dependent on their ability to hire a tax lobbyist. It's especially wrong to ask families who are struggling to make ends meet to subsidize special breaks for corporations."

And besides not paying their "fair share" of corporate taxes (which have been in a steady decline as a percentage of GDP for decades), Ralph Nader also noted that "Instead of extending patriotic gratitude, large U.S. corporations increasingly are sending the opposite message --- 'We're outta here with your jobs' --- and that "their products from foreign sweatshops are exported back to the U.S. where abandoned factories and communities proliferate."

How patriotic is manufacturing American flags in China?

Recently Nader wrote for the Huffington Post: To Big U.S. Corporations: What About Some Patriotism for America?

"These corporations rose to their enormous size on the backs of American workers. Their success can be attributed to taxpayer-subsidized research and development handouts. Not to mention those corporations that rushed to Washington D.C. for huge bailouts from the taxpayers when mismanagement or corruption got them into serious trouble.

How do these companies show their gratitude to their home country? Many of them send jobs overseas to dictatorial regimes and oligarchic societies who abuse their impoverished workers -- all in the name of greater profits. Meanwhile, back home, corporate lobbyists continue to press for more privileges and immunities so as to be less accountable under U.S. law for corporate crimes and other misbehaviors."

In a survey conducted by the Center for Study of Responsive Law, twenty of the largest unions and twenty of the largest U.S. chartered corporations were asked the following simple question on three separate occasions:

" Do you think it desirable to have your CEO and/or your president at your annual shareholders meetings stand up on the stage and, in the name of your company (not your diverse board of directors), pledge allegiance to our flag that is completed by the ringing phrase 'with liberty and justice for all?'"

In this survey, nine of the twenty unions replied that they do pledge allegiance to the flag "with liberty and justice for all" -- or as a substitute, sing the national anthem. Only two of the twenty corporations -- Chevron and Walmart -- responded with an explanation of their company's view of patriotism (but declined to respond directly to the question).

Chevron wrote: "Thank you for your recent letter requesting that we pledge Chevron'€s allegiance to the United States as a measure of corporate patriotism. While sympathetic to the spirit of your request, we believe this symbolic gesture is the wrong yardstick by which to gauge corporate patriotism. Therefore, we respectfully decline the request." They went on to say, "Chevron is not subsidized by the U.S. government. Our businesses participate in the market on their own merits." But in 2011 ConocoPhillips CEO James Mulva said that ending the tax breaks for the big oil companies would be "un-American" and "discrimination" -- then refused to apologize to the American people.

Walmart responded with what sounded more like a public relations statement (ignoring the question completely), and just went on to extol all their company's virtues by saying, "Our U.S. associates are 1.3 million strong...we know are success depends on them, and that's why we offer competitive wages."

Some of the companies that chose not to respond are: Apple, GE, GM, Verizon, J.P. Morgan Chase and Co., AT&T, Ford, ExxonMobil, Bank of America and others.

Nader closes his op-ed piece with:

"In an age of increased jingoism about freedom and American ideals, the comparative yardsticks of patriotism should be applied frequently and meticulously to the large U.S. corporations that rove the world seeking advantages from other countries, to the detriment of the United States. It is our country that chartered them into existence and helped insure their success and survival. And these corporations now wield immense power in our elections, in our economy, over our military and foreign policies, and even in how we spend time with our friends and families. The 4th of July is an ideal time to call out these runaway corporate giants who exploit the patriotic sensibilities of Americans for profit and, in wars, for profiteering, but decline to be held to any patriotic expectations or standards of their own."

Wall Street Journal (June 18, 2012) In Japan, Toyota Motor Corp. President Akio Toyoda cited the competitive advantage from domestic factories and a strong network of parts suppliers. He said Japan's export-oriented industrial base is vital for safeguarding the country's foreign-currency reserves and middle class, saying that manufacturing wages are higher than service-sector wages." Toyota's leader sounds very patriotic.

Because of the difficulty of determining which goods are actually manufactured overseas (many will still add the "Made in America" label), most of us are forced to buy foreign made products...if anything, out of necessity (such as smartphones, TVs, refrigerators and computers).

And who has the time to research the subsidiary of a subsidiary of all these corporate entities? And most of our clothes are also made in sweatshop factories overseas. Are we to just forgo all these products? Are we to be called "hypocrites" for buying these (not necessarily cheaper) products while also criticizing the offshoring of jobs --- even though the only store within miles of our homes might be a Walmart, and everything they sell are made in China --- including products that we rely on for our day-to-day living --- as well as our flags on the 4th of July.

* This was also posted at the Daily Kos. I posted a shorter version of this article at The Economic Populist

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