Corporations are people too!

So Mitt Romney uttered the line “corporations are people” and liberals jumped all over him.

Would it have been better if Mitt merely said “corporations are a nexus of contracts” instead?

Frankly, part of the public’s misunderstanding (and hence mistrust) of the income tax system is exactly due to the lack of critical thinking that the liberals have shown here.

Democratic US Rep. Debbie Wasserman Schultz of Florida mocked Romney by asking “Does General Electric have human qualities?”

No, Rep. Wasserman Schultz – GE doesn’t have human qualities – but we don’t impose taxes on “human qualities” either.

Corporations really are made up of people.  You can argue that the corporate tax system (and regulatory system) sometimes allows really bad people to make large amounts of money at the expense of poor, under-educated individuals who have no control over their plight – but hey – at least allow the debate to be about who (as in people) get or are denied what because of the tax system.

The liberals here are engaging in a popular psychology ploy – describing the enemy in the most abstract terms – so people really don’t know anything about them – except they are “big, bad corporations.” Psychologists have found that the more you know about the other side, the more you may come to empathize, or at least understand, them and their motives.

Hollywood does a great job in many movies capitalizing on this psychology behavior in humans.  For example, in the movie “Independence Day,” the alien spaceship kills millions early in the movie through a huge explosive laser beam, but you really don’t feel their pain since you really haven’t been introduced to them in the story line.  After two hours of the movie, though, if Will Smith (who you now know) had been killed, that single death would have been personal and felt more than the millions to die previously.

In another movie, Die Hard 2, a group of terrorists overtake an airport’s air traffic control system.  First, they intentionally crash a plane.  The movie audience briefly (for 5 seconds) sees the airplane’s passengers as they are preparing to land.  As the plane explodes – you feel bad – but not terrible since you never “knew” anybody on the plane.

Liberals are doing the same thing now – maligning big bad "corporations" implies they are not made up of people.

Listen – corporations are made up of people.  When a corporation makes profits, the money can go to the government or to other companies or to shareholders or to employees - including those “already filthy rich executives.”

But the money is going to people.  In order to even begin a critical discussion of how much each of these entities is entitled to - and how, if and when the tax system needs to be involved in this distribution system – you need to at least acknowledge that fact.

My doctoral dissertation in economics at Notre Dame examined something similar – what is the effect of large management buyouts on various stakeholders to a corporation (by stakeholders, I mean the US government, employees, and current and future shareholders - all ultimately "people").

Basically, I found that these buyouts (where management takes a company “private”) benefits current and future shareholders tremendously – at the cost of hundreds or thousands of employees losing their job and the US government taking in less money from tax revenues than it would have otherwise.

In Mitt Romney’s old job, he was on the receiving end of these buyouts - to the chagrin of undoubtedly thousands of former employees – and the delight of thousands of shareholders.  He knows all about “people” involved in corporations.

But at least he is ready to engage in the conversation.

And as for Debbie Wasserman Schultz - don't look for her to announce that "labor unions are not people"  anytime soon.....