by Bill Quigley / January 13th, 2014
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.
(1) 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.
(2) Direct Federal Subsidies to Corporations. The Cato Institute
estimates that federal subsidies to corporations costs taxpayers almost
$100 billion every year.
(3) 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.
(4) 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).
(5) 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.
(6) 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.
(7) The billions above do not even count the government bail out 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.
(8) 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.
(9) 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 JPMorgan 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.
(10) 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.
This article was posted on Monday, January 13th, 2014 at 10:07am and is filed under
Tax.
