The deal between big business and government – donations in return for low taxes or none – remains absolutely unchanged
By Robert Reich | The Guardian | April 11, 2021
For four decades, the basic deal between big American corporations and politicians has been simple. Corporations provide campaign funds. Politicians reciprocate by lowering corporate taxes and doing whatever else corporations need to boost profits.
The deal has proven beneficial to both sides, although not to the American public. Campaign spending has soared while corporate taxes have shriveled.
In the 1950s, corporations accounted for about 40% of federal revenue. Today, they contribute a meager 7%. Last year, more than 50 of the largest US companies paid no federal income taxes at all. Many haven’t paid taxes for years.
Both parties have been in on this deal although the GOP has been the bigger player. Yet since Donald Trump issued his big lie about the fraudulence of the 2020 election, corporate America has had a few qualms about the GOP.
After the storming of the Capitol, dozens of giant corporations said they would no longer donate to the 147 Republican members of Congress who objected to the certification of Biden electors on the basis of the big lie.
Then came the GOP’s wave of restrictive state voting laws, premised on the same big lie. Georgia’s are among the most egregious. The chief executive of Coca-Cola, headquartered in the peach tree state, calls those laws “wrong” and “a step backward”. The chief executive of Delta Airlines, Georgia’s largest employer, says they’re “unacceptable”. Major League Baseball decided to take its annual All-Star Game away from the home of the Atlanta Braves.
The basic deal between the GOP and corporate America is still very much alive
These criticisms have unleashed a rare firestorm of anti-corporate Republican indignation. The Senate minority leader, Mitch McConnell, warns corporations of unspecified “serious consequences” for speaking out. Republicans are moving to revoke MLB’s antitrust status. Georgia Republicans threaten to punish Delta by repealing a state tax credit for jet fuel.
“Why are we still listening to these woke corporate hypocrites on taxes, regulations and antitrust?” asks the Florida senator Marco Rubio.
Why? For the same reason Willie Sutton gave when asked why he robbed banks: that’s where the money is.
McConnell told reporters corporations should “stay out of politics” but then qualified his remark: “I’m not talking about political contributions.” Of course not. Republicans have long championed “corporate speech” when it comes in the form of campaign cash – just not as criticism.
Talk about hypocrisy. McConnell was the top recipient of corporate money in the 2020 election cycle and has a long history of battling attempts to limit it. In 2010, he hailed the supreme court’s Citizens United ruling, which struck down limits on corporate political donations, on the dubious grounds that corporations are “people” under the first amendment to the constitution.
“For too long, some in this country have been deprived of full participation in the political process,” McConnell said at the time. Hint: he wasn’t referring to poor Black people.
It’s hypocrisy squared. The growing tsunami of corporate campaign money suppresses votes indirectly by drowning out all other voices. Republicans are in the grotesque position of calling on corporations to continue bribing politicians as long as they don’t criticize Republicans for suppressing votes directly.
The hypocrisy flows in the other direction as well. The Delta chief criticized the GOP’s voter suppression in Georgia but the company continues to bankroll Republicans. Its Pac contributed $1,725,956 in the 2020 election, more than $1m of which went to federal candidates, mostly Republicans. Oh, and Delta hasn’t paid federal taxes for years.
Don’t let the spat fool you. The basic deal between the GOP and corporate America is still very much alive.
Which is why, despite record-low corporate taxes, congressional Republicans are feigning outrage at Joe Biden’s plan to have corporations pay for his $2tn infrastructure proposal. Biden isn’t even seeking to raise the corporate tax rate as high as it was before the Trump tax cut, yet not a single Republicans will support it.
A few Democrats, such as West Virginia’s Joe Manchin, don’t want to raise corporate taxes as high as Biden does either. Yet almost two-thirds of Americans support the idea.
The basic deal between American corporations and American politicians has been a terrible deal for America. Which is why a piece of legislation entitled the For the People Act, passed by the House and co-sponsored in the Senate by every Democratic senator except Manchin, is so important. It would both stop states from suppressing votes and also move the country toward public financing of elections, thereby reducing politicians’ dependence on corporate cash.
Corporations can and should bankroll much of what America needs. But they won’t, as long as corporations keep bankrolling American politicians.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a columnist for Guardian US