Corporate Welfare


Quotes / Links / The Deficiencies of Capitalism
"...I'm talking about the real bums, with names like Wal-Mart, Intel, Tyson, Home Depot, Boeing, Dell, Toyota, and Borders. There are two things that these outfits have in common: They are highly profitable, multibillion-dollar corporations... and they all go town-to-town, state-to-state, with their hands out, bumming subsidies from us taxpayers. it's not spare change, either--the pinstriped bums suck up a whopping $500 billion a year in give-aways doled out by our governors, mayors, and other officials...

"...the pitch goes something like this: "We might just build a new facility right here in Greater Bugtussle, creating beaucoup new jobs and scoring big political points for you, Mr. Mayor. All we'd need to seal this sweet deal is for the city and state to give us a few (ahem) 'incentives' to locate here--like, say, a truckload of cash, 40 acres of land, some new buildings and roads, free water and electricity, and an exemption from property taxes...

Intel did this in Austin, Texas. "Less than two years later, the deal soured, Intel honchos announced that Texas taxes on capital equipment were too high for their taste (never mind that corporate taxes are actually next to zilch in our state), so they were backing out, even though they had already pocketed some of our incentives...

"... they are now playing the offshore card, proclaiming that state and local governments must do more for them or they'll haul off to Asia for all future expansion...

"... but here's the carefully kept secret that exposes the incentive game as one of the biggest scams ever pulled: Corporations do not base their expansion decisions on state and local giveaways.

"It's nothing but a game, created during the past 30 years by corporate interests to convince gullible politicians, the media, and the public that this "pay to play" scam is a legitimate use of public dollars and a central element of corporate decision-making. Nonsense. Corporations decide where they're going to locate based on real business factors. It's after that decision is made that they try to score the taxpayer funds...

"Study after study has been done on these giveaways, and the overwhelming conclusion is that they create neither jobs nor economic growth" (Jim Hightower and Philip Frazer, eds. "The great corporate jobs-for-subsidies con-job." Hightower Lowdown, July 2005).


"Texas, he notes, tends to throw money at companies up front while states employing best practices, such as Oklahoma, dispense benefits only when certain employment miliestones have been met. And because Texas' financial woes are structural--there is no state income tax or corporate profits tax--it's very difficult for the state treasury to benefit...

"...there is something unseemly about a well-heeled company with highly compensated executives brandishing a tin cup and looking for a handout" (Paul Sweeney. "Texas: The Corporate Welfare State." Texas Observer, April 15, 2005: 6-9, 28).


"In subsequent years, "corporate welfare" began to be noticed critically by such right-wing groups as the Heritage Foundation and the Cato Institute. They viewed it as an unacceptable disruption of market forces and a drain on taxpayers...

"...US Rep. John Kasich (R-Ohio)...held the first hearings on corporate subsidies, giveaways and bailouts ever in Congress. Mr. Norquist joined with a mixed panel of liberals and conservatives" (Ralph Nader. "False patriotism." Progressive Populist, May 1, 2005: 19).


Links

Wikipedia on corporate welfare

10 Taxpayer Handouts to the Super Rich That Will Make Your Blood Boil The next time you hear someone complain about how the poor get “all this free stuff,” show them this.

By Tom Cahill, October 28, 2015

1. Tax Breaks for obscene CEO bonuses ($7 billion/year)
2. Tax cuts for luxury corporate jets ($300 million/year)
3. Big oil subsidies ($37.5 billion/year)
4. Pharmaceutical subsidies ($270 billion/year)
5. Capital gains tax breaks ($51 billion/year)
6. Corporate tax subsidies from state and local governments ($80.4 billion/year)
7. Handouts to Big Ag ($18 billion/year)
8. Welfare for Wall Street ($83 billion/year)
9. Export-Import bank subsidies ($112 billion)
10. Federal contracts for the top 200 biggest companies ($880 billion/year)


Where Is The Outrage Over Corporate Welfare? I don’t blame the corporations. They act rationally. If someone gives you $1 billion, you take it. The blame lies with us. The sheer size of the corporate welfare system should spark outrage whether we are conservatives, liberals, or libertarians. And that outrage should be reflected in how we vote.


Eliminate Corporate Welfare from Taxpayers for Common Sense

Corporate welfare can be defined as federal subsidies to profitable, well-established industries that do not need them.

Some of the most profitable industries in the world, such as oil and gas companies, still receive billions of dollars worth of subsidies from taxpayers every year.

Subsidies such as preferential tax rates for select industries distort free market forces and put Congress in the position of choosing winners and losers. Many industries that receive some form of corporate welfare from the federal government also manage to spend millions on lobbyists and campaign contributions every year to keep these very subsidies in place.


The 8 Biggest Corporate Welfare Recipients in America

The Huffington Post: Corporate Welfare a collection of articles

Robert Reich: We have to demand an end to corporate welfare. No more handouts to particular corporations and industries simply because they're big enough and powerful enough to get them. No more specialized tax breaks. No more exemptions or special treatment. No more crony capitalism.


True face of corporate welfare: 27 global companies that paid $0 tax Twenty-seven multinationals paid no income tax in the US last year, despite reporting pre-tax profits.

The lucky 27 avoided more than $11 billion in taxes. They also received tax refunds and other incentives from the US government, which many characterize as corporate welfare.

USA Today compiled a list of the profitable S&P 500 companies which reported negative interest tax expenses, despite racking up big bucks. Many use tax loopholes to write off losses and receive tax refunds.

US companies can assign their profits to tax-free locations such as the Cayman Islands and other nations with lower corporation tax rates than the states.

The likes of Apple, Facebook, Goldman Sachs, and many more take advantage of overseas tax loopholes at the expense of the American taxpayer.

The largest Fortune 500 companies in the US keep more than $2.1 trillion in offshore profits, according to a report by Citizens for Tax Justice and the US PIRG Education Fund.

The big banks have grown since they were bailed out for being “too big to fail” and they continue to enjoy reduced interest rates, giving them an unfair, and arguably, undeserved advantage. Bloomberg estimated the banks got $83 billion in corporate welfare in 2013.

The biggest corporations receive even further advantages due to their influence over Washington, as evidenced by the Clintons’ controversial speaking fees from Goldman Sachs.


Government Spends More on Corporate Welfare Subsidies than Social Welfare Programs About $59 billion is spent on traditional social welfare programs. $92 billion is spent on corporate subsidies. So, the government spent 50% more on corporate welfare than it did on food stamps and housing assistance in 2006.

There’s so much suffering in the world. It can all get pretty overwhelming sometimes. Consider, for a moment the sorrow in the eyes of a CEO who’s just found out that his end-of-year bonus is only going to be a paltry $2.3 million. “It felt like a slap in the face."

It doesn’t have to be this way. Thanks to federal subsidies from taxpayers like you, CEO’s like G. Allen Andreas of Archer Daniels Midland was able to take home almost $14 million in executive compensation last year. But he’s one of the lucky ones. There are still corporations out there that actually have to provide goods and services to their consumers in order to survive. They need your help.

For just $93 billion a year the federal government is able to provide a better life for these CEO’s and their families. That’s less than the cost of 240 million cups of coffee a day. Won’t you help a needy corporation today?


Corporate Welfare Grows to $154 Billion even in Midst of Major Government Cuts Even as the federal government executes major cutbacks, it’s giving huge subsidies in the form of tax breaks to industry, a fact legislators rarely acknowledge. The Boston Globe recently published a thorough and eye-popping report detailing the nature and extent of these breaks.

Lobbying for special tax treatment produced a spectacular return for Whirlpool Corp., courtesy of Congress and those who pay the bills, the American taxpayers.

By investing just $1.8 million over two years in payments for Washington lobbyists, Whirlpool secured the renewal of lucrative energy tax credits for making high-efficiency appliances that it estimates will be worth a combined $120 million for 2012 and 2013. Such breaks have helped the company keep its total tax expenses below zero in recent years.

The return on that lobbying investment: about 6,700 percent.


Corporate Personhood Our Bill of Rights was the result of tremendous efforts to institutionalize and protect the rights of human beings. It strengthened the premise of our Constitution: that the people are the root of all power and authority for government. This vision has made our Constitution and government a model emulated in many nations.

But corporate lawyers (acting as both attorneys and judges) subverted our Bill of Rights in the late 1800’s by establishing the doctrine of “corporate personhood” — the claim that corporations were intended to fully enjoy the legal status and protections created for human beings.

We believe that corporations are not persons and possess only the privileges we willfully grant them. Granting corporations the status of legal “persons” effectively rewrites the Constitution to serve corporate interests as though they were human interests.

Ultimately, the doctrine of granting constitutional rights to corporations gives a thing illegitimate privilege and power that undermines our freedom and authority as citizens. While corporations are setting the agenda on issues in our Congress and courts, We the People are not; for we can never speak as loudly with our own voices as corporations can with the unlimited amplification of money.


When Silence is Not Golden: Negative Free Speech and Human Rights for Corporations By Dean Ritz Published July 1, 2003

When is silence not golden? When it supplants people’s authority by allowing corporations to remain silent on factual information, protected by the doctrine of negative free speech.

Negative free speech is a Supreme Court expansion of the free speech provision of the First Amendment; it is a right to be free from forced association with a particular expression of speech. This legal existence has significant implications for social justice activists and serves to illustrate how the law is used to promote a narrow conception of democracy and human self-governance.

In numerous cases, US courts at all levels affirm informational diversity as one of the intentions of the First Amendment — the more voices, the better it is for a democracy. These good intentions have led to some decisions antithetical to democracy, such as the equation of money with speech (thus granting constitutional protection to corporate spending for political purposes) and the doctrine of negative free speech — particularly when it causes the withholding of factual information of public interest.


The Deficiencies of Capitalism

Hedges: Karl Marx Was Right Socialism, in other words, would not be possible until capitalism had exhausted its potential for further development. That the end is coming is hard now to dispute, although one would be foolish to predict when.

“The top five banks—JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc.—account,” the report went on, “for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits. In other words, the banks occupying the commanding heights of the U.S. financial industry—with almost $9 trillion in assets, more than half the size of the U.S. economy—would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.”

Government expenditure accounts for 41 percent of GDP. Corporate capitalists intend to seize this money, hence the privatization of whole parts of the military, the push to privatize Social Security, the contracting of corporations to collect 70 percent of intelligence for our 16 intelligence agencies, as well as the privatization of prisons, schools and our disastrous for-profit health care service. None of these seizures of basic services make them more efficient or reduce costs. That is not the point. It is about feeding off the carcass of the state. And it ensures the disintegration of the structures that sustain capitalism itself.

The capitalists respond to the collapse of their domestic economies, which they engineered, by becoming global loan sharks and speculators. They lend money at exorbitant interest rates to the working class and the poor, even if they know the money could never be repaid, and then sell these bundled debts, credit default swaps, bonds and stocks to pension funds, cities, investment firms and institutions. This late form of capitalism is built on what Marx called “fictitious capital.” And it leads, as Marx knew, to the vaporization of money.

What we saw in 2008 was the enactment of a welfare state for the rich, a kind of state socialism for the financial elites that Marx predicted. But with this comes an increased and volatile cycle of boom and bust, bringing the system closer to disintegration and collapse. We have undergone two major stock market crashes and the implosion of real estate prices in just the first decade of the 21st century.





Colby Glass, MLIS