Does Good Corporate Citizenship include Tax Reform?

The recent tax overhaul framework would reduce corporate taxes by a whopping $1.8 trillion over a ten- year period. The loss of revenue clearly means that government will swell debt or cut domestic spending since Defense spending is still a major source of business in the US.

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       Multinationals could be tax free

Further, on corporate taxes, the law would change multinational taxation to eliminate US taxes on foreign income. This could permit companies to zero their taxes by moving away from the US to places where there are little or no taxes or which offer tax treaties that result in little or no taxes, for example, to promote employment.

The net result on corporate taxation would be an essentially voluntary system in which companies could arrange their income as foreign earned money and pay no US taxes.

-        Estate tax repeal worth millions to a few

The tax overhaul would eliminate the estate tax which affects few households but provides an enormous amount of money that has reduced costs for the lowest income groups such as Medicaid and Costs Sharing Reduction in Obamacare. For the households involves such as potentially the Trump household, the savings might be as high as $1 Billion. Consider the contrast with the minimum tax for individuals and families which the proposal raises from 10% to 12 %.

-        What is good Corporate Citizenship?

The question is pertinent to the moment, does business have an obligation to consider the impact on the society of tax reform essentially intended to benefit business interests? Does good corporate citizenship begin in the beginning, when the pie is divided?

Thus far, there has been a figurative stampede of business groups in support of the as yet unspecified plan, although many groups have already mobilized to preserve special write-offs and subsidies. This is the other ethical consideration is the Congress essentially holding a favor sale- preserving the special privileges of those that offer the largest subsidy to the members—such an odd thing, US Senator salaries are about $200,000 and the few income reports I have seen in the news average annual income from salary and donations probably exceeds $2 million-  that’s a lot of Free Speech! 

It exceeds the boundaries of understatement when saying business interests apparently have a big impact on tax decisions in the Congress.

-        A question worth considering

The motto that a corporation must act in its self-interest seems a mere tissue in the post-bailout age. We had no difficulty in enlisting public assets to cure the credit crisis and the crash in 2006. This is the relevant question: does good corporate citizenship begin now when it can make a great difference  or do we wait till the gold dust has settled and start supporting local charities with tax deductible donations?