Corporations are people, too...Or are they? New legislation introduced

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Teri Bernstein, MBA, CPA has been teaching full time in the Business Department of Santa Monica College since 1985.  Prior to that, she worked in Internal Audit and Special Financial Projects for the 1984 Los Angeles Olympics, CBS, Inc., and Coopers & Lybrand (which is now part of PricewaterhouseCoopers).  She attended the University of Michigan and Wayne State University.



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Legislation is being introduced to clarify the status of corporate personhood...actually--to forbid it.  Although the exact wording of the complete bill is not available yet, the official legislation website "govtrack" reports that this legislation is:

"Proposing an amendment to the Constitution of the United States to expressly exclude for-profit corporations from the rights given to natural persons by the Constitution of the United States, prohibit corporate spending in all elections, and affirm the authority of Congress and the States to regulate corporations and to regulate and set limits on all election contributions and expenditures."

The bill is being introduced by Ted Deutsch (D-Florida), and is further described in the article "Occupy the Constitution..."

Not many of us think of corporations as though they were people, but corporations are legal entities, so their attributes are defined by the law.  Corporations have had some of the rights as "persons" for more than a hundred years.  For example, the Supreme Court, in 1819 ( Dartmouth College v. Woodward ), granted corporations the right to participate in contracts. 

In 2010, however, many felt that the Supreme Court's ruling in  Citizens United v. Federal Election Commission went too far.  The ruling held that the free speech component of the First Amendment prohibited government from enforcing certain provisions of the 2002 McCain-Feingold Bipartisan Campaign Reform Act.  This act prohibited a corporate-funded campaign ad critical of, and featuring the likeness of, Hillary Clinton. The corporation sued and eventually won. The decision was split 5-4.  

The split reflects the division of opinions on this matter.  For further reading on both sides of the issue, and for an understanding of the history of this idea, which is relevant to the business entity concept, you might want to check out:

Where the corporation-as-person issue becomes problematic for me is when the argument is made that a corporation cannot be sued for lying, because lying is a right under free speech protections.  Where does "truth in advertising" fit in with this concept?

Follow up:

1.  Read the articles linked above.  What do you think of corporate personhood?

2.  What portion of the Constitution supports corporate personhood, according to arguments being made since the 1800's?  What makes sense about this position?  Is there any part of the argument you disagree with? 

 

 

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