Friedman-Reich FAQ > Friedman-Reich > What is the full Reich proposal for treating corporations?
Reich correctly observes that corporations are artificial entities, created by law for the primary purpose of pooling capital and protecting the investor’s liability. As artificial entities, Friedman, Reich, and other believe that they should not be taxed on income, because that income belongs to the owners—partners, or shareholders in the business—who should be the ones paying the income tax. As artificial entities, corporation should not be treated as people either in any other respect. They should not be held liable for criminal intent because they are not able to “intend”. They should not be allowed to sue in courts to challenge laws, and should not be permitted to lobby to change or make laws. From his book:
"Finally, I will come to some conclusions you may find surprising -- among them, why the move toward improved corporate governance makes companies less likely to be socially responsible. Why the promise of corporate democracy is illusory. Why the corporate income tax should be abolished. Why companies should not be held criminally liable. And why shareholders should be protected from having their money used by corporations for political purposes without their consent."