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    Register of the Kentucky Historical Society
    Did you know...that the Register of the Kentucky Historical Society, first printed in 1903, is the oldest peer-reviewed publication dedicated to Kentucky history?Subscribe to the Register (only $40 per year).
  • Privatization and Taxation
    Posted On: Jun 09, 2016

                               Privatization and Taxation

                                                    joe brennan

    The Supreme Court's decision of Citizens United ushered in another major phase of the power of privatization over the American people. Now with recognition of personhood came increased influence in corporate power to influence and control not just the financial but also the political operations of the nation. Offshore offices with immunity have and continue to control the fundamental tax structure of America sheltering funds needed to provide not only for infrastructure improvements which their corporations use in their daily operations, for the maintenance of programs that support the well being of their employees, but also for the defense of nation that secures the protection of their investments.

    It is well known that tax shelters perpetuate the income and wealth inequities that separate the one percent from the ninety-nine percent. If corporations are persons then they are not very responsible or even loyal persons in terms of meeting their obligations to the American public and the nation. Through privatization of their taxable resources they are able to claim that the five by ten foot office in the Cayman Islands is responsible for all the corporation's profits, while its real operational offices on the mainland are the retainers of the corporate expenditures and losses. To make matters worse the mainland office will actually pay the offshore office for the benefits of its administrative costs.

    Private enterprise also benefit for state and local tax incentives that allow them to relocate and functions for years on end without having to pay anything to local governments for the use of their property of facilities. Again it is the employee the common tax payer that will have to make up for the loss of these tax revenues in order that the company will continue to operate in its current location. Once the tax incentive favors are no longer available the private company is free to once more relocate in a more friendlier corporate state of even country where profits may be retained or increased. It is the tax payer who must now make for the revenue loss as well as payment for the unemployment benefits of the displaced workers.

    In the likelihood that the privatization process took place under the cover of the administration of a legally recognized non-profit entity the impact of such measures are even more devastating to the local tax structure. It allows for the mother company to feed some of its excess profits into its subsidiary corporation while at the same time claiming a charitable donation to the non-profit. In this case the non-profit is able to maintain its purchase of properties or services without having to ascribe them to the mother company. Once more the beneficiary is the corporation, the loser is the tax payer.

    As Mitt Romney once said, "Remember corporations are persons, my friend". While they may legally be persons, they are not friendly persons. Privatization has given the corporations power and influence, while at the same time limiting the disposable income of the average citizen to purchase corporate products, and yes pay local and state taxes for those same goods and services. Many economists feel that this continued privatization movement will only increase economic inequalities and eventually lead to the downfall of our democracy. 


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