Corrections Corporation of America exploits tax loophole

22 Apr

The front page of this morning’s New York Times describes the latest move in the Corrections Corporation of America’s unceasing efforts to find new ways to make money on the backs of prisoners.  They have found a giant loophole in U.S. tax law that enables them to avoid all federal taxes by declaring themselves a real estate trust.  In practice this means that the folks who engage in the utterly unethical practice of financially investing in keeping a certain segment of our population in captivity now do not have to pay any federal taxes which would fund many of the social programs that help combat mass incarceration.

Jodie Lawston and I have both previously written on this blog about the inextricable links between economics and mass incarceration, and it always boils down to the simple fact that as long as major corporate interests and the government itself have strong financial incentives to lock up lots of people and keep them there for extended periods of time, we cannot reasonably believe that our criminal justice system actually functions to punish or prevent crime.  Instead it works to make sure that people who do not have the resources to defend themselves will continue to be disproportionately incarcerated and used as a cheap–or in the case of Texas prisoners, free–labor source.

The Corrections Corporation of America (CCA) is not a real estate trust, and our government should not enable  it to escape taxation.  In actual fact the CCA has been entrusted with the lives of human beings who live under conditions that no outside party can effectively regulate.  This means that the health and well being of thousands of people are subordinated to the corporation’s main objective, which is, of course, to make money.

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