Why Corporate Personhood Should Be Abolished

from DailyKos.com

Should we abolish corporate personhood?
by Eternal Hope
Mon Jul 30, 2007 at 07:30:37 PM PDT
The New Deal serves as a massive check against corporate abuse of power. But the fact of the matter is that time and time again, the rules are stacked against the people by the powerful interests thanks to the fact of corporate personhood. Under the law, corporations have special rights that you or I cannot have so that they can make the kinds of money that any of us ever dream of. They control our lives, they bust unions, they send our jobs overseas, and they seek to bring in “guest workers” as second-class citizens. They seek to suppress wages so that if we make too much, they can get rid of us and replace us with someone who is willing to work for less.
* Eternal Hope’s diary :: ::
I suggest that the people who run businesses work and play by the rules that the rest of us play by — which means that I suggest that we end special rights for corporations and the corporate elites. And the way that they exploit our lives for profits, capitalizing on human suffering and the fact that we must get from Point A to Point B, means that this may be the time to say enough is enough.
However, any attempts to level the playing field have to be looked at carefully, so that we can see the ramifications. This is not by any means the last word on the attempt to level the playing field, but the first attempt.
Here are some of the benefits of incorporation that would go by the wayside:
Protection of personal assets. Safeguarding personal assets against the claims of creditors and lawsuits. Sole proprietors and general partners in a partnership are personally and jointly responsible for all the liabilities of a business such as loans, accounts payable, and legal judgements. In a corporation, however, stockholders, directors and officers typically are not liable for their company’s debts and obligations. They are limited in liability to the amount they have invested in the corporation (eg: If $100 in stock was purchased, no more than $100 can be lost). Corporations and Limited Liability Companies (LLCs) may also hold personal assets like houses, cars or boats. If one is personally involved in a lawsuit or bankruptcy, these assets may be protected. A creditor of the owner of a corporation or LLC cannot seize the assets of the company; however, they can seize their ownership shares in the corporation, as that is considered a personal asset.
That means that if I run myself into debt, I can protect myself by putting all my assets under the control of the company so that I can immunize myself from collection efforts. I can game the system in a way that others can’t.
Transferable ownership. Ownership in a corporation or LLC is easily transferable to others, either in whole or in part. Some states’ laws are particularly attractive to this end. For example, with a Delaware Corporation, the transfer of ownership in a corporation is not required to be filed or recorded.
In other words, I can secretly transfer ownership of my company so that I can weasel out of any lawsuits that come my way. This is the whole problem — I am not anti-business; I believe that businesses and corporations should live by the same rules that the rest of us live by. And this is a prime example.
In the United States, corporations are taxed at a lower rate than individuals. Also, they can own shares in other corporations and receive corporate dividends 80% tax-free. There are no limits on the amount of losses a corporation may carry forward to subsequent tax years. A sole proprietorship, on the other hand, cannot claim a capital loss greater than $3,000 unless the owner has offsetting capital gains.
So, how is this fair? Why should one person be able to get corporate dividends tax-free while the other cannot? And why should I pay lower taxes because I happen to own a business while my neighbor down the street does not? A sports team is not better than its weakest player, while a country is not better than the least members of its society.
Credit rating. Regardless of an owner’s personal credit scores, corporations acquire their own credit rating, and build a separate credit history by applying for and using corporate credit.
Which means that I can screw around with my credit all I want and then be able to get away scot-free.
The fact of the matter is that the Constitution of this country recognizes the rights of individuals, races, religions, sexual orientation, and any other personal or biological characteristic under the sun. But there is nothing that is in the Constitution that gives the kind of rights to corporations that it does to people. Given the massive unequal playing field between us and the powerful corporate interests, it would seem that the rules are stacked against people and for corporations. People who own corporations should play by the same rules that the rest of us should.