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This is odd: America’s laws to deter corporate crime actually force victims to help subsidize the criminals.
Follow the bouncing ball here: First, a court orders a corporation to pay punitive damages to a victim of its criminal acts; second, the corporate offender pays up, then merrily subtracts a big chunk of that payment from its income tax, effectively taking money out of our public treasury; third, while the criminal is counting its tax break, the victim is notified that the punitive damage money he or she received from the corporation will be taxed as “regular income;” fourth, that means a big chunk of the victim’s payment effectively goes to replenish the public money the corporate villain subtracted.
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Bad enough that corporate-financed lawmakers legalize such encouragement of criminality, but corporate-coddling judges are playing the same disgraceful game by drastically reducing the amounts that juries order corporations to pay. In a Montana case, for example, a jury awarded $240 million in punitive damages to the families of three people, including two teenagers, killed in a car crash. The deaths were blamed on a steering defect that South Korean automaker, Hyundai, was found to have known about and “recklessly” ignored for more than a decade. But a district judge has since supplanted the jury’s ruling with her own. While declaring that Hyundai’s “reprehensibility” certainly warrants a sizeable punishment, she cut the corporation’s punitive payment down to $73 million.
Hello – that’s not punishment to a $79 billion a year car giant, it’s pocket change. Why would Hyundai executives quit putting corporate profits over people’s lives if that’s their “punishment?
With subsidies and wrist-slaps, the corporate criminal whirligig will continue to spin, making a mockery of justice.
“When Company Is Fined, Taxpayers Often Share Bill,” The New York Times, February 4, 2015.
“Hyundai Motor,” www.forbes.com, May 2014.