Corporations And Their Responsibility

Today’s S F Chronicle featured a front page magazine piece about SalesForce.com founder, Marc Benioff and his push to enlist other Bay Area corporations to follow his in being good citizens:

Salesforce.com founder Marc Benioff is challenging fellow tech leaders to raise millions to fund a new antipoverty program – and recast the industry as a local hero.

“We don’t want to be the industry that looks like ‘The Wolf of Wall Street,’ ” he told The Chronicle. “We want to be more benevolent.”

On Friday – the software company’s 15th birthday – Salesforce and the nonprofit Tipping Point will announce the formation of SF Gives, an initiative to raise $10 million over the next 60 days for Bay Area antipoverty programs.

Persuading 20 companies to contribute $500,000 apiece is just the start. Benioff, one of the city’s leading philanthropists, said he hopes to eventually expand the program to $100 million.  SF Gate

There is, by the way, a music event at Justin Herman Plaza, near the Ferry Building, all afternoon to celebrate the 15th anniversary of Sales Force and to raise money and food for that goal.

Now such corporate largesse would seem to be a welcome thing.  Who could complain about $10 million to help the impoverished?  The problem is two fold as I see it.  One, each corporation is necessarily guided by its Board of Directors along the value lines they set up.  Therefore, the decisions as to Who is supported, under What criteria for How long and When the help begins and ends are all privatized.  As we have seen recently, several corporations are suing the government for mandating medical care payments for services they don’t like.  It follows that a corporation or consortium of corporations will, predictably, have opinions about who the Deserving Poor are and distribute their support accordingly.

Secondly, the corporate anti-poverty push is so far, and likely to remain so, a local affair.  The Bay Area is home to Sales Force and many other mega billion dollar companies; Gallup, New Mexico is not.  The result of such local action will follow in the tracks of the public school system in which wealthy districts hold million dollar fund raisers every year; their districts far outstrip their poor brethren in the breadth of school offerings, size of classes, excellence of facilities, availability and quality of extra-curricular activities.  The notion of equal education and opportunity is lost but denied, since all are still in ‘public schools.’

Thirdly, how much is $10 million anyway?  According to a Forbes article, the US spends $550 billion yearly to alleviate poverty.  My calculator won’t show in decimal format how small a percentage that $10 million is.

Fourthly, why is such giving necessary in the first place?  Why are there so many poor?  Why, for example, is San Francisco the city in the nation where the disparity between its rich and its poor has grown the fastest?

What are the structural economic reasons for this?  Have salaries for Sales Force janitors, electricians and grounds keepers kept pace with those of the Benioffs and top managers?  Have the associated companies taken advantage of city and county tax breaks, thereby diminishing taxes available for infrastructure jobs?  Perhaps the smart guys in these corporations could help us all figure this out.  What are the algorithms of production, distribution and consumption most likely to get us to a stable, growth economy, where all who wish to work can, and those who are unable to work are provided for?  Where are the super-computer models that could help us move forward?

Finally, such corporate largesse if it does not now, will surely, be weighed against their corporate tax obligations.  Perhaps such gifts are already tax deductible, depriving the governments (state and national) from making decisions and allocations of tax moneys — based on input from affected communities and debates which, in theory at least,   are public.  Corporate Board decisions are not public.  Who are their constituents?  If the donations are not now deductible you can be sure that the argument will be advanced, strongly, that they should be, or should be more deductible if such corporate giving shows a decent track record in the next years.

And how have corporations done with their responsibilities to the national community through fair and equal taxation?  The corporate record can barely even be called spotty. According to a new report from Citizens for Tax Justice:

“A comprehensive, five-year study of 288 profitable Fortune 500 companies finds that twenty-six paid no federal corporate income tax over the five-year period; 111 paid no federal corporate income tax in at least one of the last five years, and one-third paid a U.S. tax rate less than 10 percent over the same period,” says a recent study by Citizens for Tax Justice, a Washington, D.C.-based group.

Among the companies that paid not a single penny over five years, despite making huge profits, are household names such as Boeing, General Electric, Priceline.com, and Verizon.

[Just scanning the report will set your hair on fire…]

Corporate Tax Dodgers

Further, the hue and cry from the GOP to roll back corporate taxes and compensate for lost revenue by stitching up loop-holes in the law is about to go silent completely, after a report by one of its own shows how many toes would have to be stepped on to come close to maintaining revenues while rolling back top tax rates.

… the Tax Reform Act of 2014 proposed last week by the chairman of the House Ways and Means Committee, Representative Dave Camp, a Michigan Republican …  seems unlikely to go anywhere, in no small part because the House Republican leadership has gone out of its way to distance itself from the proposal, praising Mr. Camp for his diligence and calling it worthy of consideration but not getting close to an endorsement.

In the talk about tax reform, there has been a general agreement that top rates should be reduced and loopholes closed, something Mr. Ryan has loudly endorsed. But there has been a great reluctance to get specific. This proposal does get specific, and in doing so it makes clear that much more needs to be done to reduce tax preferences and loopholes if we want both to finance the government and to lower tax rates.

To make the limited progress he does, Mr. Camp has to attack many tax preferences. Some are easy (did you know that for some reason the National Football League is tax-exempt?), but many are not. Americans who work overseas lose a tax break. The tax credit for buying electric cars goes away. So does the credit for adopting a child. A lot of tax provisions to provide aid for higher education costs are consolidated.

And so it goes.…

It seems to me Benioff and friends would do all of us a big favor to put significant dollars into a tax reform campaign, into national discussion, payment for expert opinion, studies of other comparable countries, into its drafting and into lobbying to pass it — taxes which are recognized as corporate responsibilities.  After the payment of that obligated to the common good, and payment to workers of sufficient wages, if there is a strong benevolent ethos or particularly profitable years, additional gifting, corporately determined, would be a very nice thing, indeed.