THE BLOG
11/28/2012 06:24 pm ET | Updated Jan 28, 2013

Corporate Responsibility and the 'Fiscal Cliff'

The incessant and distracting noises and images of political advertisements have been stilled and disappeared for another cycle. One has to wonder when the next cycle will begin or has it already started without our noticing?

In the post-election interlude it seems like everyone is waiting or asking or even pleading for the private sector to comment on the impact of the election on their business plans and more immediately and practically how should political leaders resolve the impending "fiscal cliff." Then again, of course, there seems to be no consensus on whether it is a cliff or steep slope or simply a rolling hill.

We are told that the country, like many individual Americans, has maxed out on its credit cards and other credit providing mechanisms and needs to stop before near fatal damage is done to the economy and the country. If not some awful things that are collected under the umbrella of the "sequestration" agreement that was adopted by Congress early in 2012 will actually start to occur. From day one the agreement always appeared to me like the well-practiced parental threat of Christmas stockings full of coal if certain behaviors by their children did not change or specific objectives or grades were not achieved.

The current debate on the "cliff" seems to be whether it should be a "cold turkey" type approach, a group therapy supportive type treatment or an approach that allows us to pick some date in the future of our own choosing when all the indicators will be aligned for a soft and painless landing. A variety of predictions are being made about the impact of these differing policy alternatives and the probability of lining up the needed votes in Congress to support each of the measures is being evaluated daily.

The basic elements that are contained in each of the proposals revolve around how to collect the revenues needed to run the government by changing different prescriptions in the tax code and at the same time curtailing the amount that the government spends in entitlements, defense and discretionary programs, and therefore has to borrow, on a regular basis. On full display in debate, one immediately recognizes, are some longstanding policy and platform positions that different political party platforms and political leaders have openly supported and preached.

An aspect of the debate that I find intriguing is the attention given to the thinking of corporate leaders and thoughts of the business community. I am not surprised that they should be consulted and participate in the conversation like other stakeholders but that they should be given all this attention when some of these same leaders and corporations have a solid track record for finding ways to avoid paying the taxes that the owe strikes me as a bit odd.

The fact that their tax rate of 35 percent is too burdensome is repeated frequently as one part of the argument. The fact that few if any ever pay the full rate is frequently missing from the conversation. The reliance of their business model on infrastructure and other services that the public sector provides is rarely mentioned. The number of jobs, volunteer hours and charitable contributions that they contribute to the community are frequently counted and mentioned. The essential role that the taxpayer played in rescuing the imploding economy in 2008 is conveniently forgotten.

The fulfillment of their share of the collective responsibility that we assume together for the wellbeing and livelihood of people who have spent thirty forty and sometimes fifty years in the workforce is rarely mentioned. The extent of the contribution of the productivity of that same workforce to the profitability of many corporations is often ignored. The fulfillment of the promised social security including health care benefits, that in the eyes of many have grown too expensive, is considered too onerous and replaced by inferior programs.

An open and honest consideration of the important elements that have been raised in the current debate about the "fiscal cliff" needs to happen in broad daylight. There may be no better opportunity or context within which to include on the agenda a substantive and inclusive conversation about the social responsibility of corporations. This should include a careful and factual consideration how their rate of taxation and loopholes are an essential element of that responsibility. The search for a proposal that will avoid many of the harmful consequences of a failure to come up with a grand bargain is important but it needs to be thorough and not allow the interests of one sector to deliver an imperfect resolution.

The grand bargain must include the responsibility of all stakeholders, including the private sector, to contribute their fair share to the protection of the environment, to the public services that we expect government to provide and the common good.