Email from College Professor Regarding Unions and Corporate Tax Avoidance

Here is an Email from Ari Kalechstein, Ph.D., Adjunct Associate Professor, Baylor College of Medicine, Department of Psychiatry regarding unions and corporate income taxes.

Ari writes …

Dear Mike:

I was recently forwarded a link to your site. From my perspective, the articles included in your site are well—written, primarily because they are data driven. Because I invest in a manner that is consistent with your approach, I have no doubt that adds to the appeal.

Having said that, I have two concerns with some of your recent blogs. One is related to an issue that you address; the other is never addressed, but ought to be (Note: You might have, but I’m not aware of it). With regard to the former, you have made the case that unions are “legalized mobs” (Note: I am not, and never have been, a member of a union). From my perspective, at present, unions have ceased to articulate rational arguments on behalf of their respective constituencies. The unions demand increased salaries and benefits despite the fact that are economy is in a state of decline. Like you, I find the approach of these unions to be frustrating and, to some extent, astonishing. Their approach is not unlike that of the CEOs of large financial institutions, who pay themselves large bonuses despite the fact that they would cease to exist without the benefit of taxpayer dollars.

Despite the approach adopted by these unions over the past several decades, it is important to note that unions played an integral role with respect to protecting the working man. Unions advocated for safe working conditions, reasonable pay, health benefits, etc., which, at least from my perspective, are entirely reasonable. There was a time when unions served to protect workers from employers who would have shamelessly exploited and endangered them for financial gain. Thus, rather than suggesting that unions ought to be eliminated, it might be more sensible to suggest that unions ought to re—evaluate their priorities and their overall mission.

To my knowledge, I have never seen you prepare a column on the issue of tax evasion by large corporations, such as General Electric or News Corporation. These two corporations paid no income tax in 2009. If they are doing this, I can only assume that other multinational corporations are doing the same thing. If you’re going to target the unions and the working man as symbols of economic depravity, it seems reasonable to me that you would apply the same standard to corporations