Mandatory Corporate Social Responsibility As A Vehicle For Reducing Inequality: An Indian Solution For Piketty And The Millennials
2015; Northwestern University School of Law; Volume: 10; Issue: 1 Linguagem: Inglês
ISSN
1557-2447
AutoresSandeep Gopalan, Akshaya Kamalnath,
Tópico(s)Indian Economic and Social Development
ResumoINTRODUCTIONThe income inequality debate is in resurgence. Thomas Piketty's Capital in the Twenty-First Century1 gained worldwide attention, and in doing so, reframed the wealth inequality debate.2 Many leaders, including President Barack Obama and Pope Francis, believe income inequality to be the issue of our time.3 As President Obama said in the 2014 State of the Union Address, four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened.4In an interview with The Economist, President Obama expanded on this theme:[T]he broader trend [is] an increasingly bifurcated economy where those at the top are getting a larger and larger share of GDP, increased productivity, corporate profits, and middle-class and working-class families are stuck. Their wages and incomes are stagnant. They've been stagnant for almost two decades now.5Indeed, concern about inequality crosses the partisan divide; a recent Pew Research Center poll found that majorities of 60% or more among Republicans and Democrats across the ideological spectrum agree that inequality is on the rise.6 This level of political attention is no coincidence: the CIA World Factbook shows that the Gini co-efficient for the U.S. is forty-five. This metric, which measures national inequality and income distribution, puts the United States in the same company with some of the world's poorest nations, including Cameroon, Madagascar, Rwanda, Uganda, and Sri Lanka, and in worse company than Burkina Faso, Bangladesh, Burundi, Malawi, and Ethiopia.7In the United States, the numbers are distressing. A recent Organization for Economic Co-operation and Development (OECD) report shows that the top 1% of income earners have captured 47% of overall income growth over the last thirty years.8 Strikingly, the top 10% of income earners accounted for more than half of all income in 2012!the highest level ever recorded.9 In another study, Piketty and a collaborator found that the top 1% of income earners took home more than one-fifth of all income!one of highest levels since 1913.10 Household income grew 275% for the top 1% between 1979 and 2007, whereas it only grew 18% for the bottom 20% of the population.11 Even more spectacularly, the OECD report shows that the top 0.1% of U.S. earners accounted for 8% of total pre-tax incomes. This demonstrates that disparities exist even among the rich.12 Further, these disparities extend beyond income; although half of U.S. families own stocks, about 90% of the stocks are in the hands of the top 10%.13While the average American has yet to recover from years of recession after 2008, corporate profits are at record levels relative to the Gross Domestic Product (GDP). Figures released by the U.S. Department of Commerce's Bureau of Economic Analysis show that corporate profits after tax were at a record $1.686 trillion in 2013.14 Coevally, employee compensation continues to fall.15 Wages as a percentage of GDP have fallen from about 47% in 1980 to 42.5% in 2013, whereas corporate profits as a share of GDP grew from about 4% to 11% during the same period.16Despite their prosperity, U.S. corporations continually find loopholes to avoid paying taxes and lobby Congress to strengthen business laws and incentives.17 Meanwhile, the business income tax revenue remains steady at 2% of GDP.18 Even with historically high profits, corporate taxes have also fallen from about 30% of federal revenue after World War II to less than 10% currently.19 In 2011, the amount of money collected as corporate taxes was just 2.6% of GDP-the eleventh lowest of twenty-seven wealthy countries.20Many corporations also pay far less than the American corporate tax rate of 35%.21 For instance, Apple had a worldwide tax rate of just 9.8%.22 Fifty-seven companies in the S&P 500-including Verizon, Metlife, Agilent Technologies, Seagate Technology, BristolMyers Squibb, Eaton, and News Corp-had an effective tax rate of 0%. …
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