Citizens United, Tax Policy, and Corporate Governance

Abstract

These scenarios illustrate the ways in which the Citizens United decision might enable corporations to stage tax-motivated campaign interventions that benefit certain corporate stakeholders at the expense of others. The Court's holding that certain restrictions upon corporate political speech violate the First Amendment, while representing an incremental change to existing law, essentially removed limitations upon the exercise of political speech by corporations. The Court's decision drew immediate criticism from those concerned that corporate discourse would come to dominate the political process. Other observers were offended by the Supreme Court's basic premise in reaching its holding - that corporations,
like individuals, possess free speech rights.
It is this premise that gives rise to the subject of this paper, but in a slightly different context. After all, a key difference separates corporations and individuals. An individual speaks only for himself or herself when exercising the right to free speech. In contrast, a corporation is a legal construct that apportions power among shareholders, the board of directors,  and corporate managers in the process known as corporate governance. Thus, a corporate campaign intervention, inasmuch as it involves the corporation "speaking" with one voice, cannot help but involve corporate governance issues.