Ralph Nader: Corporate Taxation System “Disgraceful”

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Long-time consumer activist Ralph Nader was recently interviewed by Tyler Cowen. Cowen spoke to Nader on a broad range of topics, including his latest book and his long-standing criticisms of crony capitalism, corporatism and special privileges for corporations.

Sweden as a model for corporate governance balance

When asked to identify countries that have managed to control corporate influence on government, Ralph Nader replied that Scandinavia and Sweden were a good place to start the discussion.

He pointed out that Sweden was actually one of the poorest countries in Europe until the late 19th century. “The rise of Sweden’s quality of economic development was associated with the growth of the cooperative movement and the social democratic parties, and the establishment of a framework where to a degree greater than most other countries, the commerce in Sweden had to adjust to the social insurance systems that were set up. So the supremacy of commercialism over worker, consumer, and other smaller power centers was not tolerated.”

He goes on to laud the Swedish politico-economic system. “You don’t see extreme poverty, or people dying because they don’t have health insurance. So the Swedish political economy has made its peace with big business….Swedes today have a minimum of five weeks’ paid vacation; they have, through their taxes, paid daycare and paid sick leave; good public transit; stronger labor laws than we do; the kind of retirement system we can only dream of.”

Ralph Nader: Underestimated the power of corporations to co-opt

When Ralph Nader was asked what he had been “most wrong” about in his career, Nader replied he “underestimated the power of corporations to crumble the countervailing force we call government.”

He goes on to say he “never foresaw the insinuation of corporatism as a policy in one agency after another in government.” He also mentions FDR’s message to Congress starting the temporary national economic commission “to investigate consecrated corporate power”.

Ralph Nader concludes his answer by saying, “There’s no organized force that comes close to the daily power to twist government in the favor of Wall Street and corporatism, and to disable government from adequately defending the health, safety and economic well-being of the American people.”

Ralph Nader: U.S. corporate taxation system “disgraceful”

When asked why U.S. corporate tax rates were so high relative to other major countries, Nader replied the U.S. tax system was riddled with loopholes that benefit corporations.

“They can game it, so it looks good. They can protest that we have the highest corporate tax rates in the Western world. But everyone knows that they game the system to levels that are staggeringly disgraceful. For example, the Citizens for Tax Justice regularly reports on corporations that make huge amounts of U.S.-based profits—like General Electric and Verizon—but pay no federal income tax.”

Ralph Nader highlights that a single worker in either of those companies pays more in taxes to the U.S. Treasury than the company itself. He also points out that “the large corporations are now moving toward tax exemption. General Electric gets money back from the treasury after it pays nothing.”

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