Corporations vs States

It is interesting to contemplate whether states have more control over corporations or if corporations are more able to evade state powers.

States have many ways to control corporations. Firstly, corporations are incorporated in a state, which means they have to abide by those rules and pay taxes to a state and often a county on top of federal taxes. States also have laws a corporation has to abide by, and if they do not abide by these laws the state can prosecute these corporations. These corporations can in turn be fined and responsible parties can even be jailed. In addition, states can collect debts corporations don’t pay. Corporations also have to abide by any international trade policies the state which it is incorporated in participates in.

Corporations in turn have many ways to avoid abiding by a particular state’s rules and regulations. The first way a corporation can avoid a state’s power is by moving. Corporations can physically move their location by moving to a different state. Another form of moving is by utilizing technology to move the sale of a product online. If your goods are bought and sold online it is harder to determine where they are being bought/sold and who should have the right to tax them. Another way a corporation can avoid abiding by a state’s power is by repackaging themselves. A corporation can alter their name or owner in order to avoid consequences from a state.

As our world becomes more technological it will be interesting to see how a state tries to impose its control over corporations. Until then it seems that states do have extensive power over corporations. Though a corporation can avoid a state’s power, eventually they will be held accountable to someone or they will cease to exist. Sometimes when a corporation changes names or owners to avoid consequences the corporation can in turn fail. As technology continues to advance and more transactions are able to be completed online it will be interesting to see how states adapt to cover these gaps in borders and regulations.