Throughout the 1990s I worked for religious nonprofits. Those groups were doubly blessed by the IRS. As religious organizations, they didn't pay taxes. And as 501(c)(3) charities, they were able to solicit tax-deductible donations.
Those privileges didn't come without some corresponding stipulations and qualifications. The very same religious status that protected us from entanglement with the state also protected the state from being entangled with us. And the tax benefits that came from being a 501(c)(3) charity were in recognition or expectation of our promotion of the common good, meaning we couldn't keep those benefits if we decided instead to focus more narrowly on a more particular or partisan, electoral good.
In practical terms, what this meant was we were forbidden to engage in electioneering. No endorsing candidates. No telling people how to vote or who to vote for. We were permitted some political advocacy in support of issues — not candidates or parties — but that advocacy could not make up more than a tiny fraction of our overall work and budget. In the language of the Internal Revenue Code, we were forbidden to "attempt to influence legislation as a substantial part of [our] activities" and we were not allowed to "participate in any campaign activity for or against political candidates."
Now some might argue that these regulations constituted a restriction of our First Amendment guarantee of free speech. Those who boast of taking "a more absolutist view of the First Amendment than many [unnamed other] people" might argue that:
Laws which prohibit organized groups of people — which is what religious nonprofits are — from expressing political views [go] right to the heart of free speech guarantees no matter how the First Amendment is understood. … Does anyone doubt that the First Amendment bars the government from restricting the speech of organizations composed of like-minded citizens who band together in corporate form to work for a particular cause?
But the truth was, despite all of the regulations and restrictions that came with our tax-free privileges, our freedom of speech was never truly constrained. We were free, at any time, to endorse candidates, to campaign for them, to lobby for legislation, or even — if we had been able to afford it — to purchase airtime to run partisan election campaign ads. That was always an option available to us. Always a possible choice.
But we did not have the option of doing all of that while also keeping the tax-free privileges we enjoyed as religious 501(c)(3) nonprofits.
There are plenty of nonprofit groups, even plenty of religious nonprofit groups, composed of like-minded citizens who have banded together to work corporately to influence legislation and to participate in campaign activity for or against political candidates. Those groups don't have to abide by any of the restrictions we had to honor, but then those groups also have to pay sales tax and property tax, and their donors cannot claim a tax deduction for their donations. These groups are lobbies or political parties and we do not provide them the tax privileges we provide for charities.
The paragraph block-quoted above comes from Glenn Greenwald's defense of the Supreme Court's recent Citizens United decision. The only change I made to it was substituting the words "religious nonprofits" for his word "corporations."
Corporations — incorporated, for-profit business enterprises — do not enjoy the same tax privileges that we enjoyed in our religious 501(c)(3) charities. No, unlike charitable nonprofits which can be easily categorized to by the single sub-section of the Internal Revenue Code that governs them, corporations enjoy vast and innumerable tax and legal privileges — privileges we haven't the time, or bandwidth, to list here.
My point here is not to argue that the multitude of tax and legal privileges enjoyed by corporations are excessive, only to point out that such privileges exist. Some of them may exist, to some extent, because of the corruption that ensues from concentrated and unchecked financial power, but some exist for better, more reasonable reasons — to recognize and encourage the public good that comes from profit-seeking corporations playing their role as corporations.
But none of the many tax and legal privileges corporations enjoy exists to encourage corporations to attempt to "influence legislation as a substantial part of their activities" or to "participate in any campaign activity for or against political candidates." Those things are not what corporations are for — they are not the reason or the purpose for which corporations have been granted their status as corporations and the privileges that go with that status.
It's certainly true, as Greenwald argues, that a corporation, just like a 501(c)(3) religious nonprofit, is made up of "like-minded citizens who band together in corporate form to work for a particular cause," but that particular cause is not lobbying and that particular cause is not electioneering.
When corporations become involved in such activities they betray not just their legal status but also all of their stakeholders — their shareholders, employees, customers and neighbors — all of those who have "banded together" to work corporately for a very different purported particular cause. When corporations engage in such extra-corporate activities, they are thus perpetrating a kind of fraud both against taxpayers, who never intended nor agreed to allow the tax privileges for corporations to be put to use meddling in elections, and against their own shareholders and stakeholders whose investment in the corporation was meant to support its "particular cause" as a corporation and not its extra-corporate activity as a lobbyist or kingmaker.
The Supreme Court has decided that the tax and legal privileges enjoyed by corporations are not conditional — that corporations, like persons, are endowed by their Creator with certain inalienable rights, including both the First Amendment guarantee of unfettered free speech and the divine right of limited liability. (The incontrovertible fact that a corporation does not have a mouth cannot be allowed to interfere with the guarantee that it may freely open its nonexistent throat to speak.)
My response to this notion is to present corporations with the same choice we had when I worked for the religious nonprofits: Feel free to lobby and electioneer, but don't expect to continue to enjoy your privileged tax status if you choose to do so. The tax and legal privileges enjoyed by corporations cannot be regarded as sacrosanct constitutional rights even by those eager to assure us of their superior commitment to "a more absolutist view of the First Amendment." We're talking about the Internal Revenue Code — the First Amendment don't enter into it.
Corporate lobbying and corporate electioneering, the scowling Justice Alito has decreed, are now constitutional rights enjoyed by constitutional persons indistinct from any other such persons. Very well. Then tax them in a manner indistinct from other such persons. Corporations want to say they're persons just like the rest of us people? Let's make them put their money where their nonexistent mouth is.
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