The Progressive Populist: Ten Examples of Welfare for the Rich

The following is an excellent article that originally appeared on the Common Dreams website on January 13, 2014 written by Bill Quigley which was republished in The Progressive Populist titled “The Progressive Populist: Ten Examples of Welfare for the Rich” and I quote:

“Ten Examples of Welfare for the Rich and Corporations”

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

Bill Quigley is Associate Director of the Center for Constitutional Rights and a law professor at Loyola University New Orleans.  He is a Katrina survivor and has been active in human rights in Haiti for years. He volunteers with the Institute for Justice and Democracy in Haiti (IJDH) and the Bureau de Avocats Internationaux (BAI) in Port au Prince. Contact Bill at quigley77@gmail.com”

(THESE ARE 10 GREAT EXAMPLES OF HOW UNBALANCED THE GOVERNMENT TAX BREAKS ARE FOR HELPING OUT THE BILLIONAIRES AND PERSECUTING, PARTICULARLY THE MIDDLE CLASS.  FED CHM BERNANKE HAS LOWERED OUR CD INTEREST RATES TO ALMOST ZERO TO HELP OUT THE HEDGE FUND MANAGERS AS SUGGESTED IN NUMBER 4, WHICH IS ONLY ONE OF THE 10 BUT IT’S AFFECTING ME PERSONALLY.  I HAVE A T-SHIRT THAT SAYS “TAX HEDGE FUND DEALERS!” ON IT.  PRESIDENT OBAMA AND HILLARY CLINTON BOTH SAID DURING THE 2008 PRESIDENTIAL PRIMARY, THEY WERE BOTH GOING TO TAX THE HEDGE FUND DEALERS BUT PRESIDENT OBAMA DIDN’T FOLLOW THROUGH.  IF HILLARY CLINTON DOES RUN FOR PRESIDENT AND FOLLOWS THROUGH ON WHAT PRESIDENT OBAMA SAID HE WAS GOING TO DO, IT WOULD MAKE HER A GREAT PRESIDENT BECAUSE IT WOULD BRING IN A LOT OF EXTRA REVENUE IN FROM PEOPLE THAT ARE EXPLOITING THEIR CUSTOMERS THROUGH THE INVESTMENT BANKS AND THEIR HEDGE FUNDS.

LaVern Isely, Overtaxed Independent Middle Class Taxpayer and Public Citizen and AARP Members

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About tim074

I'm a retired dairy farmer that was a member of the National Farmer's Organization (NFO). Before going farming, I spent 4 years in the United States Air Force where I saved up enough money to get my down payment to go farming. I also enjoy writing and reading biographies and I write about myself as well as articles and excerpts I find interesting. I'm specifically interested in finances, particularly in the banking industry because if it wasn't for help from my local Community Bank, I never could have started farming which I was successful at. So, I'm real interested in the Small Business Administration and I know they are the ones creating jobs. I have been a member of Common Cause and am now a member of Public Citizen as well as AARP. I have, in the past, written over 150 articles on the Obama Blog (my.barackobama.com) and I'd like to tie these two sites together. I'm also on Twitter, MySpace and Facebook and find these outlets terrifically interesting particularly what many of these people did concerning the uprising in the Arab world. I believe this is a smaller world than we think it is and my goal is to try to bring people together to live in peace because management needs labor like labor needs management. Up to now, that hasn't been so easy to find.
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