The Business Levy or Why I Support the Fraser Institute and You Do, Too

Two institutions hold the keys to the money vaults of the country. One is concerned about the welfare of society generally, the other about its own welfare only. One is concerned about compassion, equality and democracy, the other about profit. One is democratic, the other is not.

The first is government, the second is business. Most of the money most of us will ever have we will eventually hand over to one of these two. Governments collect their share by taxing us. This is the way we pay for the services government provides us, or perhaps I should say the services we provide ourselves—communally. We are very much aware of these taxes. We fill out an income tax form every year and the media and a variety of politicians and think tanks hardly let us forget it.

We are very much less aware, and it is never discussed in the media, that we are also “taxed” by business in order to support its social and political pursuits. Every time we buy a pair of underwear or a box of cereal, we pay the cost of manufacturing, transporting and retailing the product; we pay for a profit; we pay for advertising; and we pay a tax or levy—a little something extra for business largesse.

Hidden in the price of everything we buy are all the expenses that business incurs, including the expense of funding its friends and favourites. Via this levy we support a host of business associations, lobby groups and public relations firms (there are now more public relations professionals in North America than journalists). We support political parties. We support arts and sports organizations whose sponsorship is seen by business as amenable to their image. And we support those right-wing think tanks that serve up views flavoured to satisfy their business patrons.

It is impossible to avoid. You may prefer not to buy products from companies that contribute to groups you don’t approve of, but because this is private business, you can never be sure who contributes to whom. And almost all businesses contribute to one or more of the sorts of organizations mentioned above. Even discovering who owns a business can be a challenge, corporate ownership has become so vast and complex. Short of retiring to the north woods and living off nuts and berries, you will consume goods and services, you will pay the business levy and you will support a panoply of business-approved special interest groups. You are not free to choose.

Conservatives often criticize government funding of special interest groups. They ask why taxpayers should have to support groups they may disapprove of. A good question. But they don’t ask the same question on behalf of consumers, even though we pay a great deal more to support special interest groups as consumers than we do as taxpayers. I doubt that this inconsistency—I won’t say hypocrisy—is intentional, that conservatives overlook this coerced subsidization of business-approved special interest groups because they share an economic philosophy. I suspect they simply haven’t thought it through. We can’t blame them. The invisibility of the business levy is one of its most insidious features. It is so embedded in the cost of consumption that we simply never think about it. We can only speculate with dark amusement about how many Marxists fail to realize they support a host of capitalist organizations every time they go shopping.

Government grants merely ensure that some nonbusiness-approved special interest groups have a voice in public debate. This is a modest, almost trivial assurance compared to tapping into the business levy, but at least some balance is achieved. The balance is strictly limited, however. Groups receiving government grants are expected to serve a public interest, not a political one, such as promoting equality for women or improving the prospects of the poor. For those groups that are too partisan for government help but on the wrong side of the philosophical spectrum to partake of the business levy, raising cash means slogging from door to door, or from mail-out to mail-out, accumulating small contributions, and facing a huge disadvantage in public debate and political influence.

This distortion of public debate and political influence by the business levy is one of democracy’s biggest and most intractable problems. The tax allows the business community, most disturbingly the corporate community, to propagandize us and influence our leaders, all with our own money, and often in ways that are difficult to discover and understand. We pay to undermine our own democracy.

But what to do?

Dealing with this problem is extremely difficult because it involves freedom of speech. We don’t want to infringe on this basic freedom, yet we do want to give every voice a roughly equal opportunity to be heard, the very thing the business levy undermines. Freedom isn’t enough, equality is essential too. Freedom untempered with equality advantages not democracy but he who can afford the biggest voice. It can pervert democracy into a tool for the wealthy to preserve their power.

To begin with, we might stop granting charitable status to business levy-funded organizations whose job is to wave the corporate banner. Further, we should restrict contributions to any organizations that have a political component. Contributions to a group that isn’t transparently charitable or serving some other apolitical purpose should be limited in amount and restricted to individuals. If an organization engages in any political activity—broadly defined—it should lose its charitable status and no longer be allowed to accept money from organizations, only from citizens and only in modest amounts. Needless to say, it would have to be democratically constituted. Its freedom of speech would in no way be compromised, just the right to have the public pay for it via the business levy.

We could go further yet and politically neuter corporations. The right to incorporate could include a restriction on political activity of any kind. If a corporation violated this restriction, it would be charged with an offence under the law or even have its charter revoked. We might remind ourselves that corporations operate at our pleasure, to provide us economic services, not to involve themselves in our democratic process.

The democratic goal must be to confine participation and influence in public affairs to individual citizens and ensure those citizens a reasonably equal opportunity to play their part. Eliminating the pervasive influence of the business levy is an essential part of that goal.