“What’s Next?”: Yes, Some Corporations Can Pray — And You’ll All Pay
In its decision Monday in the Hobby Lobby case, the conservative Supreme Court majority that upheld corporations’ religious objections to birth control spends an inordinate amount of time defending itself from the reasoning and wrath of Justice Ruth Bader Ginsburg’s dissent.
Justice Samuel Alito, whose name is on the decision, alludes no fewer than 24 times to the “principal dissent,” which Ginsburg wrote for the four-member minority. Plainly, he felt Ginsburg’s powerful intellect breathing down his neck as he tried to find a path to upholding the Hobby Lobby parties’ attack on women’s rights without expanding corporate “personhood” too much.
He failed. Ginsburg concisely labels Alito’s ruling one of “startling breadth,” pointing out all the doors it opens to religious claims by business owners trumping the rights of their employees. She also observes that the majority’s answer to allowing business owners to opt out of covering their employees’ legitimate health needs is that “the general public can pick up the tab.”
In other words, the decision gives business owners the right to weasel out of their legal obligations by sticking you and me with the bill.
The Hobby Lobby case, as we reported earlier, has been percolating for months as yet another corporate challenge to the Affordable Care Act. It was brought originally on behalf of the pious owners of that privately held crafts chain, along with other private businesses. They asserted that their religious convictions were trampled by the Affordable Care Act’s mandate that medium and large employers cover contraceptives for their female employees without cost sharing—that is, without co-pays and deductibles.
The businesses pointed to a 1993 federal law, the Religious Freedom Restoration Act, which prohibits the government from imposing a “substantial burden” on a person’s exercise of religion, even in a generally enforced law. The court majority ruled that the law effectively pre-empts the contraceptive mandate in the ACA.
Eric Posner of the University of Chicago law school contends that, to the extent the majority relied on the RFRA, “Alito’s legal argument is stronger than Ginsburg’s.” But the law itself, he says, “is pretty dumb.”
Alito maintains that his decision is narrow, applying only to contraceptives, and only to “closely-held” companies — that is, not to publicly traded corporations.
Ginsburg doesn’t buy it. She asks how the ruling can be differentiated from those in which business owners pose religious objections to granting insurance coverage for “blood transfusions (Jehovah’s Witnesses); antidepressants (Scientologists); medications derived from pigs, including anesthesia … and pills coated with gelatin (certain Muslims, Jews and Hindus); and vaccinations (Christian Scientists, among others).” She concludes, “the court … has ventured into a minefield.”
Indeed, Alito himself acknowledges that “other coverage requirements, such as immunizations … may involve different arguments about the least restrictive means of providing them” — that is, exempting the employer, and letting government step in.
To a great extent, the decision turns on whether a business is a “person.” This is the same minefield the court seeded in its infamous Citizens United case in 2010, when it held that campaign finance laws limiting corporate contributions violated corporations’ free-speech rights. The detonation of those mines has laid waste to the electoral process, turning it into a playground for corporate interests. (More of a playground, anyway.)
Here the court’s majority rules that a privately held company is, in effect, a “person” that can express religious convictions. Alito sugarcoats that finding, acknowledging that corporate personhood is a “fiction,” but one designed to “provide protection for human beings.”
Ginsburg also picks that assertion clean. “The exercise of religion is characteristic of natural persons, not artificial legal entities,” she writes, quoting retired Justice John Paul Stevens as having observed in the Citizens United case that corporations “have no consciences, no beliefs, no feelings, no thoughts, no desires.”
Today’s decision invests them with all the consciences, beliefs, thoughts, and desires of characters from Tolstoy. And that’s a lot.
Alito and Justice Anthony Kennedy, in a separate concurrence, argue that the federal government has already offered an accommodation to nonprofit organizations that object to the contraception mandate — they can cede the responsibility for the coverage to their insurers, who cover their own expenses via a rebate on a federal tax. They ask: Why not extend that break to closely held companies?
(That’s how the general public would end up subsidizing the religious discrimination practiced by Hobby Lobby’s owners.)
What Kennedy and Alito seem to miss is that those nonprofit groups didn’t gain the exemption because they were nonprofit, but because their exclusive purpose was religious, not commercial. “The court forgets that religious organizations exist to serve a community of believers,” Ginsburg writes. “For-profit corporations do not fit that bill.”
It will be said that Monday’s decision walked a fine line, giving the Hobby Lobby owners what they sought without opening the floodgates to religious objections to a wide range of laws and regulations.
The court has signaled that it’s open as never before to claims by private businesses for exemptions from laws that apply to the rest of us, based on religious beliefs that can’t be objectively verified. And if they win, we’ll pay. Ginsburg’s question is apt: What’s next?
By: Michael Hiltzik, Columnist, The Los Angeles Times: Published in The National Memo, June 30, 2014
“Run Away As Fast As You Can!”: Ralph Nader Wants Liberals To Back Rand Paul. Don’t Do It.
This week, Ralph Nader returned to the political stage with a new book, Unstoppable, whose triumphant subtitle is The Emerging Left-Right Alliance to Dismantle the Corporate State. To kick off his publicity tour, he has argued that liberals should “definitely” impeach President Barack Obama, abandon the “international militarist” Hillary Clinton, and instead embrace Sen. Rand Paul (R-Ky.) as a possible leader of his dream coalition.
To what end? In the book, Nader writes that by marrying the Left with the libertarian Right, we can cut off government support for corporations and have “honest government,” “fair taxation,” and “more opportunity.” Nader sees relatively low-hanging fruit in opposing “sovereignty-shredding global trade agreements, Wall Street bailouts, the overweening expansion of Federal Reserve power, and the serious intrusions of the USA PATRIOT Act against freedom and privacy.” He also articulates loftier, if not fully fleshed out, aspirations to “push for environmentalism,” “reform health care,” and “control more of the commons that we already own.”
Some liberal commentators, like Esquire‘s Charles Pierce and the American Prospect‘s Scott Lemieux, are dismissing Nader’s vision as fantastical, since the Right will never join his progressive crusade. But Nader’s vision should not be dismissed so quickly. He leads his book with concrete examples from the 1980s of when he put Left-Right coalitions together to stop an over-budget nuclear reactor project and to pass legislation to protect whistleblowers who uncover wasteful government fraud.
More recently, Sen. Bernie Sanders (I-Vt.), Rep. Alan Grayson (D-Fla.), and then-Rep. Ron Paul (R-Texas) joined forces to pass legislation auditing the Federal Reserve. Nader is correct that there are opportunities to build ideologically diverse coalitions and that coalition building is the key to getting most anything you want out of politics.
However, coalition building requires compromise and, most critically, prioritizing one set of issues over another. The trade-offs inherent in Nader’s path into Rand Paul’s arms should make liberals run screaming.
The Nader strategy of a permanent coalition with the libertarian Right greatly limits what liberals can accomplish. Where there is a joint desire to restrain government (end the drug war) and limit spending (stop corporate welfare), a Nader-Paul alliance can form. But you can forget about anything that involves new government regulation, higher taxes, and more spending. That would preclude big-ticket liberal priorities like capping carbon emissions, expanding anti-poverty programs, guaranteeing universal preschool, and investing in infrastructure.
Nader effectively deprioritizes those goals, because his primary agenda is to “Dismantle the Corporate State.” But the hard truth is that if liberals want to make progress on their core agenda, the coalition to nurture is not with the Paulistas. It’s with the CEOs.
The little-talked-about secret of most major liberal accomplishments over the past 80 years is that they received some degree of corporate support, at least enough to disempower conservative opposition. This is true for much of FDR’s New Deal, LBJ’s anti-poverty legislation, and environmental regulation, as well as Obama’s stimulus, repeal of the Bush tax cuts, Wall Street regulation, and health-care reform.
As I observed in the New York Times following the Supreme Court’s upholding of ObamaCare, “When corporations are divided or mollified, reformers can breathe. The president can be heard. Business owners can be convinced that they will remain profitable. The dim prospect of perpetual gridlock can be trumped by the allure of regulatory certainty.”
Nader wants to scrap this long, if quiet, history of liberal success that has built the pillars of modern activist government in favor of prioritizing a civil libertarian agenda. His strategy makes sense if you think smashing the NSA is more important than saving the climate or feeding the hungry. I suspect most liberals would not make that trade.
There’s nothing wrong with forging temporary, limited partnerships with whoever is willing to play ball at that moment. You can work with libertarians against corporations on global trade today, and cooperate with corporations against libertarians on funding infrastructure tomorrow.
But Nader’s vision goes beyond ad-hoc coalitions. He wants to permanently side with government-hating libertarians over government-accepting corporations. That may have superficial appeal to liberals currently agitated over income inequality, but it’s not the strategy that helped liberals in the past century build the social safety net, reduce poverty, and avoid another a Great Depression.
By: Bill Scher, The Week, May 2, 2014
“Me, Pay Taxes?”: How Wall Street Avoids Paying Its Fair Share in Taxes
Like many Americans, you’ve probably just spent a good bit of time figuring out how much you owe in taxes. Most of us fill in the forms and follow the rules. But the rules are a lot more flexible for the largest U.S. corporations, and especially for the major Wall Street financial institutions and their top executives and owners. Banks and financial companies capture more than 30 percent of the nation’s corporate profits, but manage to pay only about 18 percent of corporate taxes while contributing less than 2 percent of total tax revenues, according to the Bureau of Economic Analysis and the International Monetary Fund.
What’s more, the owners and senior managers of our major financial institutions can exploit the loopholes in our individual income tax on a far greater scale than the rest of us. Below is a short guide to a few of the major ways that Wall Street avoids paying its fair share.
But I earned it in the Cayman Islands!: American corporations have developed a panoply of ways to route income through low-tax foreign subsidiaries. This practice goes well beyond the financial sector. Indeed, the latest publicized example involves a manufacturing firm, Caterpillar. Because of the inherently “placeless” nature of many financial transactions, however, financial institutions and their investors are among those in the best position to move income around in this fashion. The major Wall Street banks have thousands of subsidiaries in dozens of countries, all capable of engaging in transactions that enjoy the full guarantee of the U.S. parent company even as they take advantage of the tax or legal advantages of their foreign incorporation. Transactions in the multi-trillion dollar global derivatives market, for example, can pretty much be relocated anywhere in the world with the touch of a computer keyboard.
A way to crack down on the massive potential for tax avoidance this creates would be to simply rule that financial transactions backed up by a U.S. firm are in effect U.S. transactions and subject to U.S. tax law. Whatever international tax rules are designed to protect real manufacturing activity in other jurisdictions from inappropriate taxation should not apply to the passive income gained from financial activities that can easily be transacted from anywhere in the world. For some years U.S. tax law attempted to follow this principle, but starting in 1997 an “active financing” loophole made it much easier for multinationals to avoid taxation on financial transactions by moving profits to low-tax foreign subsidiaries. Combined with so-called “look through” provisions, these international tax loopholes mean that U.S. multinationals get to look around the world for the cheapest places to locate their earnings.
It’s not work, it’s investment!: The U.S. taxes capital gains on investments much more lightly than it taxes ordinary income. The details get complicated, but in general the profit on investments is only taxed at a maximum 15 to 20 percent rate, as opposed to a rate of almost 40 percent for high levels of ordinary income. Though its stated goal is to encourage investment and saving, a tax differential of this size can be seen as a subsidy to financial speculation, since it penalizes wage work compared to trading profits, and accrues to any investment held longer than a year, whether or not it can be shown to actually create jobs. In addition to the broad impact of the tax differential, the gap in rates creates a windfall for wealthy Wall Street executives in a position to maximize its benefits. Those who work for big hedge and private equity funds are in the very best position to do that, as they take much of their work income from the investment returns of the fund. Since they are legally permitted to classify this “carried interest” income as capital gains, they can cut their tax rates effectively in half – a windfall that costs the federal government billions of dollars a year, and means that some of the wealthiest individuals in America pay a lower tax rate on their earnings than an upper-middle-class family might.
Who, me, sales tax?: It’s easy to forget at this time of year when we’re all working on our income tax, but the sales tax is also one of the major taxes you pay each year. State and local governments take in more than $460 billion a year through sales taxes charged on everything from cars to candy bars. But Wall Street speculation isn’t charged a sales tax at all. Indeed, you’ll pay more sales tax for your next pack of gum than all the traders on Wall Street will pay for the billions of transactions they undertake every year. The non-partisan Joint Tax Committee of the U.S. Congress estimates that a Wall Street speculation tax of just three basis points – three pennies per $100 of financial instruments bought and sold in the financial markets – would raise almost $400 billion over the next decade. What’s more, such a fee would significantly discourage the kind of predatory trading strategies recently highlighted by author Michael Lewis, strategies that depend on trading thousands of times in a second in order to manipulate stock markets and extract tiny profits from each trade.
This only starts the list of ways Wall Street financial institutions and the people who run them manipulate the system and avoid paying their fair share; there are plenty more, including the use of complex financial derivatives to shelter individual income, the variety of techniques used by hedge and private equity fund partners to avoid effective IRS enforcement, and the continuing tax deductibility of corporate pay above $1 million, as long as it is sheltered under a so-called “performance incentive.” Tax time would be a good time for our elected representatives to get to work closing some of these gaps and loopholes, and leveling the playing field.
By: Marcus Stanley, Economic Intelligence, U. S.News and World Report, April 16, 2014
“Pity The Poor Plutocrats”: Time’s Winged Chariot Draws Near, And There’s No Baggage Compartment
Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt…a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.
–President Dwight D. Eisenhower, in a 1954 letter to his brother Edgar
Pity the poor plutocrats, victims of the envious mob. You can hardly open the Wall Street Journal these days without reading a self-pitying screed by some billionaire hungry for love.
A while back it was venture capitalist Tom Perkins, who equated criticism of the wealthy with the Holocaust.
“I would call attention to the parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich,’” he opined in a letter to the newspaper.
Makes sense to me. One day they’re saying Wall Street bankers should pay the same tax rate as the guys who rotate their tires, next day they’re flinging them into concentration camps. Soon billionaires will be hiding in attic penthouses, quietly fondling stock certificates. Their limos will be disguised as UPS trucks, their yachts as humble tugboats.
In a subsequent San Francisco speaking engagement, Perkins suggested that the United States formally adopt a one-dollar, one-vote electoral system. Citizens, he said, should be like shareholders in a corporation.
“You pay a million dollars in taxes, you get a million votes. How’s that?”
The audience laughed, but Perkins claimed to be dead serious. Kleiner Perkins Caufield & Byers, the investment firm he co-founded, called itself shocked, and emphasized its disagreement.
More recently, Charles Koch, the elder of the infamous Koch brothers of legend and song, contributed an op-ed to the Journal bitterly complaining that people targeted by TV attack ads he’s paid for are actually allowed to talk back. The brothers, you see, are pure idealists campaigning for liberty.
So that when their Tea Party front groups oppose a public transport system in Nashville, Tennessee, work to forbid Georgia Power from investing in solar technology, or spend big on a county referendum on open pit mining in Wisconsin, it has nothing whatsoever to do with Koch Industries’ oil, gas and mining profits. It’s all about freedom.
And when the same organizations spend millions on TV commercials featuring actresses reading prepared scripts, pretending to have been injured by the Affordable Care Act and attacking Democratic U.S. senators in Arkansas, Louisiana and Alaska, that too is all about liberty.
However, wicked “collectivists” who “promise heaven but deliver hell,” — hell evidently being reliable health insurance not subject to cancellation on an employer’s whim — have called the Koch brothers out. One such is Senate Majority Leader Harry Reid, who went so far as to call their secretive methods “un-American.”
“Instead of encouraging free and open debate,” Charles Koch whined, “collectivists strive to discredit and intimidate opponents. They engage in character assassination. (I should know, as the almost daily target of their attacks.) This is the approach that…Saul Alinsky famously advocated in the 20th [century], and that so many despots have infamously practiced. Such tactics are the antithesis of what is required for a free society.”
“Despots,” mind you. Boo-hoo-hoo. Far from being abashed, Senator Reid must have been thrilled that his taunts lured Koch out of hiding. These boys normally prefer to hide the hundreds of millions they spend purchasing U.S. Senate seats behind benign-sounding outfits like “Americans for Prosperity.”
Because who’s against prosperity, right?
That said, I do think it’s wrong to call anybody “un-American.” To the contrary, the Koch brothers are every bit as American as John D. Rockefeller, H.L. Hunt or Scrooge McDuck, dabbling in his private bullion pool. The comic-heroic figure of the tycoon furiously stamping his little webbed feet because people are free to disagree with him has long been a staple of national life.
Like Charles and David Koch, who inherited hundreds of millions from their oilman father — a founding member of the John Birch Society, which famously held that President Eisenhower was a card-carrying member of the International Communist Conspiracy — their legacy often includes crackpot megalomania. Hence “collectivists,” a polite euphemism.
Koch’s Syndrome, you might call it: combining an obsessive-compulsive need to accumulate money — these boys are worth $100 billion, but they’re nevertheless bitter about paying taxes — along with a deep-seated fear of being found unworthy. Surrounded by obsequious underlings all their lives, they’ve no idea if they’ve ever really deserved it.
It may also be significant that Tom Perkins is 82, the Koch brothers 78 and 73, respectively.
Time’s winged chariot draws near, and there’s no baggage compartment.
By: Gene Lyons, The National Memo, April 9, 2014
“Wake Up, People, And See The Danger We’re In”: While Watching With Eyes Glazed, Democracy Is Being Stolen
This is a column about campaign finance reform.
And your eyes glazed over just then, didn’t they?
That’s the problem with this problem. Americans know that government truly of, by and for the people is unlikely if not impossible so long as the system is polluted by billions of dollars in contributions from corporations and individual billionaires. Half of us, according to Gallup, would like to see public financing of campaigns; nearly 80 percent want to limit campaign fundraising.
And yet somehow, the issue seems to lack a visceral urgency in the public mind. William Ostrander understands that all too well.
“There are people that will go nuts over the Second Amendment,” he says in a telephone interview. And not to diminish the importance of self-defense, he adds, but “when you look at the practical character of it, what’s going on in campaign finance corruption is far more injurious to their lives, their well-being and their children’s lives than anything most people have had to deal with with the Second Amendment.”
Ostrander is a farmer in tiny San Luis Obispo, CA, and the director of something called Citizens Congress 2014. Its members include a schoolteacher, a small-business man, a firefighter, a general contractor and a doctor — your basic average Americans — who have collectively invested thousands of volunteer hours to set up a summit (June 2-5) of lawyers, lawmakers, academics, advocacy groups and other experts.
Their aim: to brainstorm strategies and craft a plan of action to eliminate the influence of big money in politics.
Quixotic? Perhaps. But Ostrander says he has commitments from a number of high-profile individuals, including: former labor secretary Robert Reich, Harvard law professor Lawrence Lessig; and Trevor Potter, the former chairman of the Federal Election Commission, who is probably best known for his appearances on The Colbert Report, where he helped Stephen Colbert set up a SuperPAC.
We should wish them success. Because truth is, while many of us watch with eyes glazed, democracy is being stolen right out from under us. Consider that last week, the Supreme Court issued a ruling further loosening the limits on campaign donations. Consider the unseemly way four presumptive presidential aspirants ran to Las Vegas to kiss Sheldon Adelson’s ring when the billionaire casino magnate announced he was looking for candidates to support. Consider what billionaire Tom Perkins said in February: Only taxpayers should have the right to vote and the rich should have more votes.
We’re already moving in that direction. As new Voter ID laws and other restrictive measures cull the electorate of poor people, brown people and young people, as the Supreme Court further tilts the playing field toward the monied and the privileged, the notion of one person, one vote, the idea that we each have an equal say in the doings of our government, comes to feel … quaint if not downright naive.
So the politician, though she came to office determined to do right by her constituents, finds she must pay greater attention to the needs of a large donor than to those of the people she was elected to represent. And you get paradoxes like the one last year, where, although 91 percent of us wanted criminal background checks for all gun sales, somehow that didn’t happen, didn’t even come close.
It’s not the politicians’ fault, says Ostrander. “There are some really great people in Congress, honestly. It’s the system that’s broken. The system needs an intervention.”
And that won’t happen until or unless more Americans wake up from their stupor and recognize this as the clear and present danger it is. Ever feel your government doesn’t represent you?
That’s because it doesn’t.
By: Leonard Pitts, Jr., Columnist, The Miami Herald; Published in The National Memo, April 9, 2014
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