Read

Search form

Ten Examples of Welfare for the Rich and Corporations

Ten Examples of Welfare for the Rich and Corporations
Fri, 2/28/2014 - by Bill Quigley
This article originally appeared on Common Dreams

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 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.

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.

Bill Quigley is Associate Director of the Center for Constitutional Rights and a law professor at Loyola University New Orleans.

Originally published by Common Dreams

Add new comment

Sign Up

Article Tabs

fascism, Donald Trump, Nazis, capitalists, Goldman Sachs, Brexit, racist politics, Kim Phillips-Fein

We would not have the rabidly free market, neoliberal – and increasingly fascist-leaning – system we have today if not for capitalists who have invested in small far-right groups from the 1930s onwards.

Dakota Access pipeline, Standing Rock Sioux tribe, Keystone XL pipeline, oil pipelines, gas pipelines, pipeline protests, carbon emissions, oil pollution

For starters, this protest is about a competing idea for the future of the planet – and waves of people will show up to make that point.

Mexican teacher strikes, Nochixtlán massacre, National Coordination of Education Workers, National Union of Education Workers, Enrique Peña Nieto, Mexican school closures, MORENA party, National Regeneration Movement, California Federation of Teachers, Ca

As the Mexican school year is starting, teachers in four states have refused to return to classes until a negotiated agreement changes the government’s program – and perpetrators of a massacre are held responsible.

Rapid population growth, wastewater pollution, an increase in dams – and sweeping changes wrought by climate change – are imperiling Pakistan's treasured wetlands and river systems.

EpiPen, Heather Bresch, Joe Manchin, Mylan Pharmaceutical

Sen. Amy Klobuchar has demanded hearings on the EpiPen’s 450 percent price increase in just seven years.

Hillary Clinton, corporate presidency, Trans-Pacific Partnership, TPP, oil and gas industry, fracking, Ken Salazar, John Podesta, Bernie Sanders, Tim Kaine, Democratic National Committee, DNC

Rhetoric aside, Clinton is showing her full solidarity with Wall Street – most recently with the announcement that former Interior Secretary and oil and gas industry insider Ken Salazar will chair her transition team.

Posted 6 days 10 hours ago
EpiPen, Heather Bresch, Joe Manchin, Mylan Pharmaceutical

Sen. Amy Klobuchar has demanded hearings on the EpiPen’s 450 percent price increase in just seven years.

Posted 4 days 15 hours ago

Rapid population growth, wastewater pollution, an increase in dams – and sweeping changes wrought by climate change – are imperiling Pakistan's treasured wetlands and river systems.

Posted 3 days 16 hours ago
Black Lives Matter, George Zimmerman, Trayvon Martin, Philando Castile, Alicia Garza,

Again and again, the movement has challenged the abandonment of Black communities underlying a wave of police violence.

Posted 6 days 10 hours ago
income inequality, the 99%, Occupy Wall Street

It may not improve much next year, if House Republicans have their way.

Posted 5 days 7 hours ago
income inequality, the 99%, Occupy Wall Street

It may not improve much next year, if House Republicans have their way.

Rapid population growth, wastewater pollution, an increase in dams – and sweeping changes wrought by climate change – are imperiling Pakistan's treasured wetlands and river systems.

Hillary Clinton, corporate presidency, Trans-Pacific Partnership, TPP, oil and gas industry, fracking, Ken Salazar, John Podesta, Bernie Sanders, Tim Kaine, Democratic National Committee, DNC

Rhetoric aside, Clinton is showing her full solidarity with Wall Street – most recently with the announcement that former Interior Secretary and oil and gas industry insider Ken Salazar will chair her transition team.

act out, occupy, art, creative activism, private prisons, DOJ, CCA, GEO, ICE, federal bureau of prisons, 2016 olympic games, olympics in rio, olympic devastation, favela, brazilian government, dilma rousseff, michel temer, income inequality, solutionary

This week: The DOJ announced that they're breaking up with private prisons.

Black Lives Matter, George Zimmerman, Trayvon Martin, Philando Castile, Alicia Garza,

Again and again, the movement has challenged the abandonment of Black communities underlying a wave of police violence.