- Chop the
legs out from under “Big Business”, bring them back from la-la land, and this
Country’s economy may stand a fighting chance of surviving.
Ten Examples of Welfare for the Rich and Corporations
BILL QUIGLEY FOR
BUZZFLASH AT TRUTHOUT
Here are the top ten examples of corporate welfare and welfare
for the rich. There are actually thousands of tax breaks and subsidies for the
rich and corporations provided by federal, state and local governments but
these ten will give a taste.
One: State and Local Subsidies to
Corporations. An excellent New York Times study by Louise Story calculated that
state and local government provide at least $80 billion in subsidies to
corporations. Over 48 big corporations received over $100 million each. GM was
the biggest at a total of $1.7 billion extracted from 16 different states but
Shell, Ford and Chrysler all received over a billion dollars each. Amazon,
Microsoft, Prudential, Boeing and casino companies in Colorado and New Jersey
received well over $200 million each.
Two: Direct Federal Subsidies to
Corporations. The Cato Institute estimates that federal subsidies to
corporations costs taxpayers almost $100 billion every year.
Three: Federal Tax Breaks for
Corporations. The tax code gives corporations special tax breaks which reduced
what is supposed to be a 35 percent tax rate to an actual tax rate of 13
percent, saving these corporations an additional $200 billion annually,
according to the US Government Accountability Office.
Four: Federal Tax Breaks for
Wealthy Hedge Fund Managers. Special tax breaks for hedge fund managers allow
them to pay only 15% rate while the people they earned the money for usually
pay 35% rate. This is the break where the multimillionaire manager pays less of
a percentage in taxes than her secretary. The National Priorities Project
estimates this costs taxpayers $83 billion annually and 68% of those who
receive this special tax break earn more than $462,500 per year (the top one
percent of earners).
Five: Subsidy to Fast Food
Industry. Research by the University of Illinois and UC Berkeley documents that
taxpayers pay about $243 billion each year in indirect subsidies to the fast
food industry because they pay wages so low that taxpayers must put up $243
billion to pay for public benefits for their workers.
Six: Mortgage Deduction. The home
mortgage deduction, which costs taxpayers $70 billion per year, is a huge
subsidy to the real estate, banking and construction industries. The Center of
Budget and Policy Priorities estimated that 77 percent of the benefit goes to
homeowners with incomes over $100,000 per year.
Seven: The billions above do not
even count the government bailout of Wall Street which all parties have done their
utmost to tell the public they did not need, they paid back, or it was a great
investment. The Atlantic Monthly estimates that $7.6 trillion was made
available by the Federal Reserve to banks, financial firms and investors. The
Cato Institute estimates (using government figures) the final costs at $32 to
$68 billion, not including the takeover of Fannie Mae and Freddie Mac which
alone cost more than $180 billion.
Eight: Each major piece of
legislation contains new welfare for the rich and corporations. The Boston
Globe analyzed the emergency tax legislation passed by Congress in early 2013
and found it contained 43 business and energy tax breaks worth $67 billion.
Nine: Huge corporations which
engage in criminal or other wrongful activities protect their leaders from
being prosecuted by paying huge fees or fines to the government. You and I
would be prosecuted. These corporations protect their bosses by paying off the
government. For example, Reuters reported that JP Morgan Chase, which made a
preliminary $13 billion mortgage settlement with the US government, is allowed
to write off a majority of the deal as tax deductible, saving the corporation
$4 billion.
Ten: There are thousands of
smaller special breaks for corporations and businesses out there. There is a
special subsidy for corporate jets which cost taxpayers $3 billion a year. The
tax deduction for second homes costs $8 billion a year. Fifty billionaires
received taxpayer funded farm subsidies in the past twenty years.
If you want to look at the welfare for the rich and corporations
start with the federal Internal Revenue Code. That is the King James Bible of
welfare for the rich and corporations. Special breaks in tax code is the reason
there are thousands of lobbyists in the halls of Congress, hundreds of
lobbyists around each state legislature and tens of thousands of tax lawyers
all over the country.
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