POLITICAL MYSTERY

The power to tax is the power to destroy.” I don’t know who originally said that but it is true. Nevertheless, the sad truth is that in our democracy it is almost impossible to exercise that power when it comes to corporations of any kind but especially those that are “too big to fail”. Of course, the government we elect should be the only force that has the power to tax. This implies that the government is sovereign but is it. It was interesting to read about Theodore Roosevelt’s, a Republican, struggling to have congress pass a law not to tax but to gain the power needed to tax corporations.

Think about the convolutions of that statement. The elected Congress of The United States, the most powerful entity in our country, had the constitutional right to tax the people, but they had to pass a law to giving themselves the power to tax a business entity, which means that a legally recognized form of business had been “invented” after the Founding Fathers wrote the constitution—corporations are not people. That business entity had not been subject to taxation until congress passed that law. The invention of corporate structure, actually it evolved, happened in the era of Cornelius Vanderbilt in relationship to transportation industry. The idea or a “spirit” inherent in the corporate invention was that they were created to the benefits of the public, which justified their “tax free” existence. Corporations were then as now, a mean of accumulating enough wealth to capitalize great undertakings such as transcontinental railroads or long canal projects, which truly did benefit society.

The government was often a partner in the corporation through investment of land, for example, for railroad right of ways. The use of land to support corporations was easy for Congress as opposed to use taxpayers’ money to capitalize business entities, which would be controlled by “boards of directors” or non-government bodies. In addition, individuals, sometimes businesses, sold stocks to capitalize their ideas, thus, these corporations took on a public character. Regardless of how it happened, in a sense “public” assets were used to subsidize corporations controlled to use to enrich themselves and if the company was publically held, their shareholders. Corporations and individually owned business that engage in interstate commence, came under limited scrutiny of the Federal Government. However, for the most part, non-elected individuals completely controlled these private entities. Some of them were huge and assumed the nature of a country in controlling the lives of huge numbers of people who worked for them.

The conflict with elected government was becoming obvious at both the state and federal level. The need to exercise government control over corporations was coming to a head during the Roosevelt administration. The different parties contained both conservatives and liberals. More and more the philosophy of the Republican Party reflected that new divide; one wing of the party stood with the good of the people or the workers and the main body of the party beholden to the interest of the corporations or the boards of directors. Observers labeled Roosevelt, who stood with the workers, as a progressive with the main body of the party labeled Republicans. He skillfully maneuvered a vote to tax corporations among other antitrust legislation.

Like today, political governance has that same divide except the Democratic Party becoming more and more the party of the workers and liberals and the Republican Party the party of conservatives and corporate executives: same name but a different amalgamation of philosophies. From the history written by Doris Kerns Goodwin, the progressive wing of the Republican Party merged with the Democrats of the day, although in the context of her book those Republicans with the progressive political philosophy merged with the democrats (It was interesting in that she barely mentioned democrats). It wasn’t until Lyndon Johnson in 1964 that the great civil rights upheaval added a social structural element to the structure of political parties. Now it seems, the two parties are more pure in their worker verses business enterprise predilection with the peculiar twist that the government has taken on a different character as exemplified buy something I heard on TV. Shockingly, an elected representative while being interviewed said that the elected representatives do not represent the people; it sounded like an oxymoron but it isn’t. It tells us what many of us already know; business controls the government. Which brings us full circle; thanks to Teddy Roosevelt, “congress has the power to tax corporations” thus has the power to control businesses, but will not do it because businesses control the voters who elect representatives. I should add they control the Supreme Court as well. There is a mystery in all of this.

I scratch my head wondering what the Founding Fathers could have done to foresee, and perhaps understand what we do not seem to understand, the mystical power of money to corrupt how people vote, and if they did understand, what solution they might have had. We need patriots to affect a solution but we have to accept the responsibility of finding what that solution might be.  It is like trying to understand moral order.  

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