From the Judge's Chambers

Scratching the itch

by William C. Whitbeck

James R. Hoffa, Jr. and I share one thing in common. We both went to the University of Michigan Law School at the same time. In fact, we were classmates. So it was with considerable interest that I read his recent column in The Detroit News. The column’s basic premise was quite simple: big corporations are at fault for many of our nation’s ills.

To support this contention, Hoffa first asserted that a number of corporations—he pointed to Citigroup, General Electric, and Chevron in particular—paid no federal taxes last year. But he failed to mention that, so far as I know, this was all perfectly legal. Given the complexity of our tax system it is unfortunately true that persons, whether real or artificial, can through a variety of means completely avoid the payment of taxes. In fact if they are real artful, like Chevron, they can get a rebate!

But where is the fault here? To fault corporations, whether big or small, for seeking to minimize their payment of taxes is something like faulting a truck driver for foregoing a toll road. The federal tax code is a Kafkaesque monstrosity foisted upon us by the Congress and the IRS. Change the code, simplify it, eliminate the special purpose deductions, give-backs and hidden subsidies, make it flatter, more uniform and more understandable and then, perhaps, General Electric might pay some taxes.

Hoffa then goes on to assert that, “Last November, corporations brought a new breed of political stooge to Congress and to statehouses across the country.” Although Hoffa avoids party labels, this must mean that he believes corporate funding fueled the significant gains that Republican candidates made in the wave election of 2010.

But let’s look at the money, using the data that the incredibly useful Open provides. Take the top 15 all-time donors from 1989 to 2010, based upon Federal Elections Commission data as of February, 2011. Of these 15, only four—AT&T, Goldman Sachs, the National Association of Realtors, and Citigroup—are business-related. And these business groups split their contributions roughly equally between Republicans and Democrats.

All the rest, with the exception of a trial lawyers’ group, are unions and all of them strongly favored Democrats. Hoffa’s own union, the Teamsters, gave a total of almost $30 million dollars between 1989 and 2010 and 93% of it went to Democrats. AFSCME, the American Federation of Teachers, and the Communications Workers of America were even worse, with only 1% or less of their money going to Republicans.

So if members of Congress are bought and sold, the data certainly suggest that it is the unions that are doing most of the buying. To imply, as Hoffa does, that corporations have the money and the power to influence elections to the overall detriment of the country is simply to ignore the reality of campaign contributions.

Hoffa also asserts that we have an “unbalanced economy” and that we suffer from “enormous inequality.” I presume this inequality is the growing gap between the very rich and the rest of us. Now, I must admit that the fantastically high salaries paid to Wall Street whiz kids, professional athletes,

Hollywood entertainers, computer technocrats, corporate executives, television talking heads, and big time college football coaches leave me with a very sour taste in my mouth.

But do these free market anomalies really make a difference in the lives of those of us who are not, and never will be, rich? Apart from the sour taste, I don’t think so. Our current budget and debt crises have many causes, but the fact that some people are making too much money is not one of them.

James Hoffa, Jr. aside, let them make it and squander it while we get on with our own lives. Concentrating on the life style of the very rich is like scratching an itch; it may feel good but it doesn’t make the itch go away. Indeed, it’s sort of like blaming big corporations for all of the country’s problems.


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