Corporations Pay Lots of Taxes, and it’s Only Natural that They Should Have Legal Rights

Despite the recent demonization of corporations, corporations pay lots of taxes, including most of the nation’s property taxes, notes Josh Barro. They often pay higher sales and property taxes than individuals due to structural biases in the tax code. In 2010,

businesses paid about $280 billion in federal corporate income taxes. But over that same period, they paid $619 billion in taxes to state and local governments. The largest components of that tax bill were property tax ($250 billion) and sales tax on purchases by businesses ($124 billion). . . total property tax collections in the United States were $425 billion in fiscal 2010. That means businesses paid 59 percent of all property taxes, even though they only own about 40 percent of the country’s taxable real property. This happens because most jurisdictions tax business property at an unfavorable rate compared to owner-occupied housing. . .The structure of state sales taxes, which often exempt many consumer services while taxing intermediate purchases of goods . . . shifts the tax burden toward certain business activities.

Contrary to left-wing talking points, the legal rights of corporations, which are essentially associations of persons, are nothing new, make perfect sense, and are not a right-wing invention. As Wikipedia notes,

In 1818, the United States Supreme Court heard the case Dartmouth College v. Woodward, 17 U.S. 518 (1819), making the following statement in their decision: “The opinion of the Court, after mature deliberation, is that this corporate charter is a contract, the obligation of which cannot be impaired without violating the Constitution of the United States. This opinion appears to us to be equally supported by reason, and by the former decisions of this Court.” . . .Seven years after the Dartmouth College opinion, the Supreme Court decided Society for the Propagation of the Gospel in Foreign Parts v. Town of Pawlet, (1823) in which an English corporation dedicated to missionary work, with land in the U.S., sought to protect its rights to that land under colonial-era grants against an effort by the state of Vermont to revoke the grants. Justice Joseph Story, writing for the court, explicitly extended the same protections to corporate-owned property as it would have to property owned by natural persons. Seven years later, Chief Justice Marshall stated that, “The great object of an incorporation is to bestow the character and properties of individuality on a collective and changing body of men.”

As Wikipedia also notes, European human rights law also recognizes the rights of corporations in light of the fact that they are legal persons, and associations of actual persons:

The European Convention on Human Rights extends fundamental human rights also to legal persons, which can file applications with the European Court of Human Rights in Strasbourg in case of a violation by one of the 47 signatory states.

For example, the European Court of Human Rights’ 2009 decision in Dubus S.A. v. France ruled that the French Banking Commission violated an investment company’s rights under Article 6 of the human-rights convention by subjecting it to disciplinary proceedings that lacked “independence and impartiality,” citing its “combination of investigative and judicial functions.” European court rulings have routinely applied the due-process protections of Article 6 of the Convention to corporations. See Michael Addo, Human Rights Standards and the Responsibility of Transnational Corporations (1999) at pp. 194-95 (discussing four such cases, including (1) Dombo Beheer v. Netherlands (1993), (2) Editions Periscope v. France (1992), (3) Union Alimentaria Sanders SA v. Spain (1989), and (4) Societe Stenuit v. France (1992)).

It is odd to see the media disparage the idea of a corporation having rights, given the fact that media companies constantly invoke the First Amendment and other constitutional rights, like the right to a public trial. The most important First Amendment cases in the past half century have been brought by media companies, such as New York Times v. Sullivan (1964), which overturned a damage award against a media company for libel (and in the process radically cut back the reach of American defamation law), and New York Times Co. v. United States (1971), which ruled in favor of two media companies seeking to publish the Pentagon Papers. Most constitutional rights have been held to apply to corporations (and corporations in general, not just media corporations).

Denying a corporation the right to raise constitutional challenges to its mistreatment would harm human beings: its shareholders, whose earnings could be wiped out by unjust seizures or fines that occur without due process.