On October 28, 2015, Tom Cahill writes on US Uncut:
The next time you hear someone complain about how the poor get “all this free stuff,” show them this.
A small number of incredibly wealthy Americans are ridiculing Bernie Sanders’ base for wanting “free stuff” when the costliest programs are, by far, corporate welfare and entitlements for the top 1 percent. Fox News has been working hard to tear down Sanders’ proposals to provide Medicare for all, institute tuition-free public college, boost infrastructure spending, and expand Social Security.
“That’s not fiscally possible unless the federal government starts seizing private assets,” said Bill O’Reilly.
But O’Reilly is wrong. The money for Sanders’ platform can easily come from eliminating the costliest entitlement programs for the top 1 percent and multinational corporations. Here’s a breakdown of the most superfluous giveaways to the rich and how much they cost the rest of us:
1. Tax Breaks for obscene CEO bonuses ($7 billion/year)
Currently, the biggest corporations are exploiting a 20-year-old loophole that allows them to write off inflated compensation packages for CEOs, billing stock options, and performance-based bonuses to taxpayers. In 2010, the Economic Policy Institute found out that the biggest corporations cost Americans$7 billion by writing off inflated executive pay. Between 2007 and 2010, this loophole accounted for more than $30 billion in corporate welfare. According to The Guardian, fast food industry CEOs cost taxpayers$64 million through this loophole.
That $7 billion could singlehandedly fund the annual budget for the National Science Foundation — which, as I recently reported for US Uncut, funds 11,000 scientific research projects each year and has funded 26 Nobel laureates in the last 5 years.
2. Tax cuts for luxury corporate jets ($300 million/year)
Currently, corporations can claim a huge tax deduction every year by writing off purchases of corporate jets, lavish cars, and chauffeurs as “security” for their top executives. A Bloomberg analysis from 2011 showed that these tax breaks for some of the wealthiest Americans cost the rest of us $300 million each year. While that may not sound like much, that’s approximately 50 percent of the annual budget for the Consumer Financial Protection Bureau, the brainchild of Elizabeth Warren that protects Americans from the financial sector’s most predatory schemes.
3. Big oil subsidies ($37.5 billion/year)
According to Oil Change International (OCI), the U.S. government spends anywhere between $10 billion and $52 billion per year on corporate welfare for the fossil fuel industry — one of the wealthiest industries in the world. OCI estimated that total combined subsidies to big oil approached $37.5 billion in 2014, which includes $21 billion on production and exploration subsidies.
These subsidies alone cost more than what we currently spend on providing rental assistance for low-income families. In 2013, the department of Housing and Urban Development allocated a total of $34.3 billion toward tenant-based rental assistance ($19 billion), project-based rental assistance ($8.7 billion), and general public housing programs ($6.6 billion). These programs helped 4.5 million families — half of whom are elderly — keep a roof over their head.
4. Pharmaceutical subsidies ($270 billion/year)
As US Uncut has previously reported, the pharmaceutical industry costs taxpayers roughly $270 billion a year when accounting for the cost we pay for life-saving drugs whose patents have been bought up by Big Pharma. This is over $1,914 per household in corporate welfare. This is partly due to the Medicare Part D bill that George W. Bush signed into law in 2003, which prevents Medicare from negotiating drug prices with pharmaceutical companies. But the biggest drug companies also make a pretty penny (a combined $711 billion in profits between 2003 and 2012) by buying patents for drugs that were largely developed with taxpayer-funded research, then jacking up the price by absurd amounts after cornering the market.
This $270 billion annual subsidy could be virtually eliminated by passing Bernie Sanders’ bill to establish a government fund that buys up drug patents as soon as they become available for purchase. Then, the government would sell drugs at-cost to save money for those who need them. The money saved could pay for the annual $270 billion in insurance costs from Obamacare that would help more Americans get access to healthcare.
5. Capital gains tax breaks ($51 billion/year)
When anyone makes money from selling off investments, the IRS classifies that as capital gains, which are taxed at a lower rate (20 percent as of 2012) than real, actual work (35 percent). Pew Research found that53 percent of Americans own no stock at all, and out of the 47 percent who do, the richest 5 percent own two-thirds of that stock. And only 10 percent of Americans have pensions, so stock market gains or losses don’t affect the incomes of most retirees. The Century Foundation found that the total amount of lost revenue by taxing capital gains at a lower rate than wages cost $256 billion between fiscal years 2012 and 2016, or $51 billion a year over the last 5 years. According to the Tax Policy Center, if investment income was taxed at the same rate as wages, 75 percent of that new revenue would come from the richest 0.3 percent of Americans; 92 percent of that revenue would come from those making $200,000 or more per year. The chart below shows what percentage of income each tax bracket makes from capital gains — not surprisingly, the wealthiest Americans get most of the benefit from capital gains.
If we taxed wealth like work, the extra $51 billion per year in savings could fund two-thirds of the annual budget for food stamps.
6. Corporate tax subsidies from state and local governments ($80.4 billion/year)
In 2012, the New York Times did an analysis of every existing tax break in each of the 50 states and learned that 1,874 programs cost taxpayers $80.4 billion every year for corporate welfare in their state. Compare that cost with the cost of providing tuition-free public college to every student, which The Atlantic estimated would be a mere $62.6 billion. As the chart below shows, this is actually way cheaper than what we currently spend on federal student aid.
7. Handouts to Big Ag ($18 billion/year)
Crop insurance — a program originally intended to help farmers recover from the dust bowls of the 1930s — has become a slush fund for wealthy corporate farmers who have become experts at manipulating the system for their own means. As Bloomberg reported, the median income of commercial farm households (in which farming makes up more than 50 percent of a household’s income) was $84,649 in 2011 — 70 percent more than the average American household. Farmers have learned to exploit the program by growing crops on land they know will be unproductive, then making money from insurance claims rather than crops. In 2011, 26 farmers each got an annual subsidy of $1 million, including one tomato farmer in Florida who got a $1.9 million subsidy.
This $18 billion in corporate welfare is more than NASA’s annual budget, which has hovered around the$17 billion mark since 2009.
8. Welfare for Wall Street ($83 billion/year)
The biggest banks have grown even bigger than they were just before the 2008 financial meltdown. And due to their size, these banks are perceived as “too big to fail,” as their demise would spell doom for the US financial sector as a whole. So as these big banks grow bigger, the Federal Reserve allows them to borrow at lower interest rates than other big banks — essentially subsidizing the continued growth of the big banks. In 2013, Bloomberg estimated the ten biggest TBTF banks suck up $83 billion per year in corporate welfare.
If we were to force the big banks to borrow at the same interest rates as every other bank at a rate of $83 billion per year, that would be enough to double the current federal budgets for highway spending ($48.6 billion), Head Start ($10.1 billion), the Environmental Protection Agency ($7.89 billion), nutrition assistance for women, infants, and children ($6.2 billion), the National Parks Service ($3 billion), and the Federal Deposit Insurance Corporation ($2.39 billion), with $5 billion left over.
9. Export-Import bank subsidies ($112 billion)
This week, the House of Representatives voted to revive the Export-Import (Ex-Im) bank, which has been maligned as a slush fund for large, multinational corporations. In its most recent year, the Ex-Im bank had a $112 billion portfolio, of which $90 billion went to multinationals. If that wasn’t bad enough, a huge portion of that money went to just 10 wealthy corporations.
According to the New York Times, the federal government spends roughly $105 billion on public K-12 schools. If we allow the Ex-Im bank to fade away, the money formerly set aside for corporate subsidies could instead double that investment in public education.
10. Federal contracts for the top 200 biggest companies ($880 billion/year)
The biggest 200 corporations have an excessively unfair advantage over their competitors due to their influence in Washington. According to the Sunlight Foundation, the top 200 companies spent a combined $5.8 billion on lobbying Congress between 2007 and 2012. And in those same years, those companies received $4.4 trillion in federal contracts. That $4.4 trillion is $100 billion more than what the U.S. government spent on providing a basic income to the nation’s 50 million Social Security recipients. This chart shows how much the top ten corporations spent on lobbying and how much they got in return:
The combined cost of these 10 corporate welfare programs is $1.539 trillion per year. The three main programs needy families depend upon — Temporary Assistance for Needy Families ($17.3 billion), food stamps ($74 billion), and the Earned Income Tax Credit ($67.2 billion) — cost just $158.5 billion in total. This means we spend ten times as much on corporate welfare and handouts to the top 1 percent than we do on welfare for working families struggling to make ends meet.
http://usuncut.com/class-war/10-corporate-welfare-programs-that-will-make-your-blood-boil/
My comment is more a question. Why? Why is this happening? Because of all that is happening in the world, and all of the restrictions that are coming from the regressive Republican Party, how is this allowed? It is now, more than ever I wish we did not have a representative democracy. We the People are being robbed blindly, by our own paid robbers…people from both parties. Our Nation is being destroyed, from the inside, and most citizens are working and being too busy to really understand, their hard earned money is being stifled, while their high taxes are keeping sleezy corporate and political individuals who have never had a hard day’s work in their life, collect billions and laugh at all who give. I guess the only way to stop this is to have another American Revolution. There is power in numbers. We the People should revolt, and shut the country down ourselves. No banking, all who have a job, for any reason, should stop, until we get those thieves who-are stealing our money imprisoned! That includes the congress ! If I were to get a 6 percent on a test in school, would that be sufficient ? What if I hired an employee, who after 6 months, were only able to do 6 percent of what needed to be done. Would I give him a raise? After all that I could do within my power to help this individual, I would have to let him go. It’s past time in changing our government to a more equatable format, where the Supreme Court of the United States will never have the righto railroad this country by allowing the rich to buy the politicians. We also need to be able to legally make the media responsible in delivering the truth. Straight facts! Fox News is destroying this country! true knowledge, to all , will allow all to make proper decisions based on those facts. our country would be a much better place! But, you and I know, that as long as the way things are, it will never happen. Good people will make bad choices based on the lies they are constantly been told.
My comment became a rant. Sorry, but here it is.
Everyone needs to read this article!
This report is unbelievable, and how did we come to allow all of these subsidies? Obviously the various lobbying groups paid our politicians and government officials to let these industries write the rules and get them passed into laws or prevented closure of loopholes that allowed them to bilk we taxpayers. Aren’t their laws against politicians or government employees taking bribes or “gifts” or “contributions”? Why doesn’t the FBI or U.S. Attorney General’s office take action against these people? Laws must be enforced on the “special interest” lobbyists who are engaged in fraud and corruption.
Sounds to me, that you have made a really wonderful argument for eliminating 99% of our government and all of the taxation that goes with it! If the only responsibilities of the federal government were limited to 6 main areas, we could have a robust economy that would take care of all the rest. Those 6 areas would be:
Defence
Justice (notice I don’t say Laws)
Our Monetary System
Transportation (roads,rail,shipping, air)
Immigration
National Parks
The Federal Government should run like a business. It should charge fees for it’s services and use it’s assets to earn the funds needed to pay for those services that are not readily fee based.
There would still be taxes at the state level, but I think the model could extend over time to elliminate taxation altogether.
Let’s embrace capitalism and get away from socialism.
Socialism has proven itself to fail time and time again. It promotes a lazy, worthless, uncaring, and morally decrepent society.
Capitalism promotes hard working, confident, energetic, motivated, and ingenious individuals who care for and about each other and deal with each other in a moral respectable way. It also provides for a path for growth for every individual willing to put forth effort.
Our current government system has gotten bloated and corrupt and needs to be cut to a reasonably trim and functional size. Most of it’s power over us, needs to be taken back. It needs to get back to Serving a specific purpose (or set of 6 purposes).
Thank you so much for the article and the facts I can use as talking points. I live in a very red part of OH. (10 taxpayer handouts to the super rich that will make your blood boil)
This is all in my book A Look In The Mirror: The Disintegration of our Morals, Values, Ethics and Society – Can America be Saved? We fell for every trick and trap the aristocrats set to empower themselves and I’m the only one I know of to say it takes two to Tango. Want the real truth how we became an oligachy? Go to http://www.amazon.com/Look-In-The-Mirror-Disintegration-ebook/dp/B011M2NKPQ or B&N http://www.barnesandnoble.com/w/a-look-in-the-mirror-the-disintegration-of-our-morals-values-ethics-and-society-can-america-be-saved-darrell-cass/1122478311?ean=2940151000543
Not to mention the rich buying multi million dollar yachts, which are built in the USA and then sold ‘offshore’ to avoid taxes. The small town where I live produces luxury yachts that are sold ‘offshore’ and registered in the Bahamas or Liberia and other places to avoid sales taxes.
Superbly useful contribution. Thanks!
Thank you very much for exposing all this!
The corporate take over of the U.S. Government and the U.S. election system at the expense of the working middle and lower income classes, must be stopped and reversed! America can only be called prosperous, if it has a large middle class!
Company lawyers writing the company’s own congressional bills, which are then presented to corrupt, bribe receiving public servants in the U.S. Congress, who will swiftly submit them as their own so they can become law, is the ultimate proof of how corrupt and rotten our Government has become!
Our government has not only allowed, but has also strongly supported and subsidized the closure of tens of thousands of U.S. factories and the subsequent exportation of good paying U.S. jobs to low wage, third world nations! It is the epitome of corruption and treason!
This makes my blood boil!
I’ve been telling anyone who’s willing listen about the upward wealth redistribution policies of the Republican Party.
The tax breaks mentioned in the article above are just a few of the more than 1,000 “DELs” (Deductions, Exemptions, Loopholes) written into the federal tax code by Republicans in 2001 and 2003. For all false equivalency idiots out there, the GOP wrote, passed and signed into law those upward wealth redistribution policies without Democratic help.
What too many people seem to forget is that those DELs are designed to reduce the “adjusted gross income” of the wealthy and big corporations so that they end up paying significantly less in federal taxes, if anything. And, in the case of the big corporations, the DELs not only reduce their lax liability to zero, they also give the big corporations REFUNDS on billions of dollars of profit per year. With the DELs, it matters little what the tax rate actually is for the wealthy and big corporations. Those DELs, btw, cost this country $1.5 TRILLION in lost federal tax revenue per year. Think about that. If you’re a Progressive or Moderate Republican, you should be just as angry at what your party has done as the rest of us. And, you need to go to the polls next year in large numbers and vote for Democrats, something your 1930-1966 forebears had the wisdom and courage to do in the first Republican Progressive and Moderate Revolution.
THESE HANDOUTS NEED TO BE STOPED, PRONTO.
THE MONEY’S THAT ARE BEING HANDED OUT WOULD FEED ALL OF OUR HUNGRY PEOPLE AND PROVIDE MEDICAL CARE FOR THEM ALSO.
THIS IS NOTHING BUT RICH PEOPLE AND CORPORATE GREED, GREED, GREED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Speaking of incredible waste, the US spends about twice what the rest of the industrial world does on health care because it has a for-profit system.
In 2014, the US wasted $1.9 Trillion. Yes. Trillion with a ‘T’.
Would you kindly provide references for this article? This would make this much more effective.
10 TAXPAYER HANDOUTS TO THE SUPER RICH THAT WILL MAKE YOUR BLOOD BOIL
You were correct….this makes me sick…So now what do we do.
This is exactly why we need Bernie Sanders for president.
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