Monday, June 7, 2010

Who Takes The Hand Outs? The Corporations. A Brief Look At Corporate Welfare And Why Our Country Is Going Broke

Still upset about those welfare mamas? I'll give you a different picture. There is another kind of welfare mama and she wears a business suit and drives around in limousines. She is called Miss Multinational Corporation. She is very big, so big she can convince the congressmen that she shouldn't have to pay taxes for a variety of reasons. She also gets handouts from the government in other ways too.

Have a look at this slightly old article, Most companies paid no taxes during the boom, from MSN Money.

Think about this as you sign that check to Uncle Sam next week: More than 60% of all U.S. companies paid no federal tax at all during the boom years of 1996 to 2000, the General Accounting Office reports.

In 2000 alone, 94% of all U.S. corporations paid less than 5% of their total income in corporate taxes, the GAO said in a report released Friday. Among the largest corporations -- the 1% of all corporations that owns 93% of all corporate assets -- 82% paid less than 5% of their income in taxes.

And it wasnt just American companies avoiding a bill. About 70% of foreign-owned companies doing business in the United States paid no federal tax in the late 1990s, the GAO said. The GAO report covered 2.1 million returns by U.S. companies and 69,000 foreign-owned companies....

Or since we talked about Monsanto in the last post, of course Monsanto wants hand outs too! Have a look at this article.

The Des Moines Register is reporting today that Monsanto (MON) is getting $681,000 in corporate welfare from the taxpayers of Ankeny for the promise bringing in 25 new jobs.

Is this the same Monsanto whose stock is up nearly 1000% in the past 5 years and is currently up 105% over the last 365 days?

And $681,000 in property tax kickbacks for the promise of creating 25 new jobs over the next two years? That's over $27,000 per job!

This is the same Monsanto who paid their CEO Hugh Grant (not that Hugh Grant) $3 million in salary last year while he exercised an additional $8 million in stock options. The CEO made $11 million dollars last year and we're giving him another $681,000.....

Think I am just pulling out old articles? Have a look at this ABC article from this year entitled GE, Exxon Paid No U.S. Income Taxes in '09.

As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all.

The most egregious example is General Electric. Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.

Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.

Under Obama, corporate welfare has increased not decreased as we can see from this Huffington Post article, entitled Barack Obama: King Of Corporate Welfare.

No matter what else he achieves or where he falls short, Barack Obama can lay claim to the title of King of Corporate Subsidies.

Using any of a variety of measures, the Obama administration has broken all records in the distribution of taxpayer dollars to American businesses, primarily banks, automobile manufacturers and insurance companies.

The tidal wave of dollar bills has stunned folks on all sides of the political spectrum.

David Arkush, director of Ralph Nader's Public Citizen's Congress Watch, told the Huffington Post, "In the form they have taken to date, the bailouts appear to be classic corporate welfare: As best we can tell, the government is giving astonishing amounts of money to private corporations and demanding far too little in return."...

It seems though the Huffington Post was on to the problem a couple years before that last article as we see here how one writer points out that education can be used as a diversion to avoid targeting globalization and the corporate welfare it creates.

Most of Obama's speech is a rambling ode to happy-sounding concepts like "democracy" and "unity" and "bipartisanship." It was only toward the end that the audience got a taste of substance on the defining economic issue of the next 50 years: globalization. ...

You can make everyone in America a PhD, and all you would have is more unemployed PhD's - it would do almost nothing to address the fact that the very structure of our economy - our tax system, our trade system and our corporate welfare system - is designed to help Big Money interests ship jobs offshore and lower wages/benefits here at home.

That gets us to exactly why the Great Education Myth is so often repeated by politicians: because it is the one myth that simultaneously looks like an economic panacea to the public and avoids offending the Big Money interests that bankroll political campaigns. Talk of reforming our trade policy to equalize capital protections (copyrights/patents) and human protections (labor/wage/enviro) threatens Corporate America's efforts to use foreign economic desperation to increase the bottom line. Talk of ending massive taxpayer subsidization of job outsourcing threatens the profit margins of the major political donors like General Electric that are benefiting from such gifts. Talk of cutting corporate welfare threatens the corporate welfare queens that write big checks to politicians. Talk of sending more taxpayer dollars to schools even if that prescription will do very little to address the country's structural economic challenges - well, that threatens nobody....

And then of course we might start to understand why it won't be the fault of some evil greek socialists, when we ourselves become bankrupt, it will be the result of "corporate socialism" which in the end is corporatism, which in the end is exactly what most of the Republicans and Democrats have been pushing for the last twenty years. There are other factors for our debt troubles as well, a costly inflated military for one, but as the years go on the corporations are sick and failing and require more and more hand outs from the population to continue their reign. Why should we continue their reign?

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