The year-end transition is again replete with the consideration of resolutions concerning possible changes in behavior, activities or other patterns of action. Little seems to be known or reported about how many of these benchmarks or objectives are fulfilled or about how contented those who made resolutions are as the New Year unfolds.
As we prepare to bid 2012 adieu here in Washington, a phalanx of cameras are trained on Congress as they attempt to fulfill one of their old resolutions and to stave off the impending gloom portended by the "fiscal cliff." Unable to come to an agreement on taxes and spending months ago, they thought it best to give themselves a hard end-of-year deadline. The negotiating, we are told, has been nonstop for the last five weeks.
One of my former professors frequently asserted that the federal budget, and for that matter any budget document, is one of the premiere places where moral priorities and choices are most transparent. The struggle of our political leaders to come to an agreement at this late hour is in many ways a clear reflection of the differing values, beliefs and priorities that are found across society.
At its core, our inability to agree on a plan to raise the revenue that we need to fund the responsibilities and services that we believe our government should provide is a debate about the role and philosophy of government. Pollsters tell us that we all want the government to reduce both its debt and spending levels but not to cut back on any of the programs or services that we have come to rely on. In fact, they also tell us that a great number of us are not even aware of the numerous government programs and services that we and our families rely on almost every day.
Most corporations are resistant, ambivalent and in denial about the role and responsibility of government, the "subsidies" that they have either benefited from historically or continue to rely on as an important part of their business operations, and fail to acknowledge the size and depth of their responsibility to contribute to the public coffers. We are constantly reminded by the talking heads on the major business channels (CNBC, Bloomberg, Fox) and in other media outlets that one of corporation's top priorities and expectations of government is a stable, predictable, long term legal framework and regulatory environment around which they can build their business plans and conduct their operations.
The front page of the Dec. 17 edition of the Financial Times captured another of the prickly points in this debate with a headline that stated: "US banks want new liquidity rules eased to help bridge $800bn gap." The article goes on to recount the efforts of U.S. banks to push back against the new proposed global standards for liquidity requirements intended to stave off future financial crisis like the one that occurred in 2008. Ironically, the lead editorial in the same paper that day, headlined "Banks must learn from past scandals," argued that "A new culture is required at the top of financial institutions." The forthcoming debate about the appropriate regulation of firearms and violent video games, in light of the horrible tragedy in Newtown, Conn., will surely present another instance of corporate ambivalence about how they understand both their social responsibility and the role of government.
At the moment, while the focus is primarily on the rate at which individuals and couples, who make more than a quarter of a million dollars annually, should be taxed; extending unemployment insurance and redeploying the social security tax; numerous other elements of the tax code await consideration in the coming year.One of the issues that we and Congress will have to tackle, in the path to revenue enhancement and a balanced budget, is a clear and measurable tax rate for corporations that are domiciled or operate in the U.S. This includes the requisite disclosure and transparency that will allow citizens to determine how well these corporations are fulfilling their social responsibility. Three resolutions that corporate leaders might do well to consider as they are out of the spotlight are as follows:
- Review the many public services on which their businesses rely on a regular basis.
- Include in that review, the publicly funded research and education that contributes to their business.
- Consider objectively what appropriate corporate tax rate is commensurate with their public citizenship.