Volume 1, #32 April 15, 1997 POLITICS WITH BITE! CONTACT HELP previous BACK ISSUES next
A FORUM FOR ANTI-AUTHORITARIAN POLITICAL OPINION, RESEARCH AND HUMOR

The Welfare Connection



What isn't reflected in the government's spending breakout is that money from each of these categories winds its way, in massive amounts, to the pockets of the wealthy, who don't pay in nearly what they take out. Capital gains taxes have plummeted. The percentage of U.S. income taxes paid by corporations (as opposed to individuals) has dropped from 25% to 8% in the last 40 years; the U.S. has by far the lowest corporate income tax rate of any Western country.

Boeing, for example, not only paid no income tax last year (for a company that, were it a sovereign country, would have a greater GDP than all but about 35 countries in the world), but it got $34 million in rebates from the feds. Its acquisition of McDonnell-Douglas and Rockwell this year ought to bring more such generous bonuses. Congresses and Presidents and Governors and state legislatures of both parties keep cutting taxes for the best-off, giving us a more and more regressive tax system. The end result: a massive asset-suction device in which we pay in, but we never see most of the benefits.

In FY 1997, conservative estimates pegged about $170 billion--some 15% of discretionary funds--as going directly into corporate welfare. That didn't include the enormous category of taxes not collected through tax breaks or legal loopholes (e.g, the Clinton administration's gift of accelerated depreciation deductions, an accounting trick that amounts to a interest- free federal loan to corporations--worth an estimated $19 billion a year).

The $170 billion corporate welfare total also doesn't include payments (such as the debt interest) that go from the Federal Reserve directly into private banks. Or, for that matter, the money spent to administer regulatory agencies that are acting essentially as profit-boosters for the industries they supposedly regulate. Or regulations (e.g., tariffs on foreign goods, but free trade for outsourced production) that allow companies to keep their labor costs low and/or artificially inflate their prices at consumers' expense. Or undervaluation of public resources given to private enterprise. And on, and on, and on.

How wretched is the corporate welfare you're paying for on Tax Day? Here's a few scattered highlights:

Mining. Every year, gold, silver, and other mining companies extract an estimated $3.6 billion of minerals from public lands, while paying nothing to the federal treasury. Under the archaic Mining Law of 1872 (which the Clinton regime, under heavy pressure, has refused to amend), mining companies can purchase these lands for $2.50 or $5 per acre. In 1995, Interior Secretary Babbitt sold public land containing $10 billion worth of gold for less than $6,000. Afterwards, cleanup of the cyanide, arsenic, and other mining wastes left behind is also done, or not done, at public expense.

Timber. The Forest Service, under the U.S. Dept. of Agriculture (that should warn ya right there), is in the business of clearcutting our National Forests. Fly over the Cascades; it's a moonscape. That's largely public land, with public roads built to make the extraction for private profit easier. The resulting environmental damage, erosion, flooding, etc. also gets dealt with (if at all) out of our pockets.

Anti-Anti-Trust. The law is supposed to prevent monopolies. Instead, especially under Clinton, it's now promoting them. Even deals like the Boeing-McDonnell Douglas merger, which leaves Boeing as the only commercial jet maker in the U.S., not only get winks and nods from the FTC and Justice, but get subsidized--the feds, under current law, actually pay for the costs of the merger and resulting downsizing. (This law resulted in a windfall of over $1 billion, including some $31 million in federally- funded executive bonuses, when Lockheed swallowed Martin-Marietta last year.) Taxpayers get hit all over again in monopolized industries that can raise the prices of what they sell to the government--most notably, military contractors, where the two dozen or so major companies of five years ago are now down to five, and will probably be down to three (Boeing, Lockheed, and a merger of the rest) by the end of the year.

Weapons Exports. The U.S., in the wake of its successful genocidal attacks on Iraq, has zoomed to an unprecedented dominance of the world's arms trade market--now approaching 70% of global sales. But behind the fancy equipment is massive government spending, particularly under Bill Clinton. Last year, government subsidies for foreign arms sales (through mechanisms like the Import-Export Bank) came to $7.6 billion. These weapons--in addition to being morally reprehensible in their own right--are also developed entirely at taxpayer expense. And then sold by transnationals like Boeing to whomever has the cash, for whomever they wanna kill.

Nuclear Power. No commercial nuclear power plant has been built since 1973, but the industry receives an estimated $10.5 billion in subsidies. One particularly offensive handout is the Advanced Light Water Reactor program, which gives millions of dollars to G.E. and Westinghouse to develop new reactors for which there is no U.S. market.

Agriculture. Receives over $10 billion a year in subsidies. Includes the tobacco industry (responsible for perhaps 500,000 deaths annually in the U.S. alone); sugar cane (ravaging the Everglades); and programs like the $110-million-a-year Market Promotion Program which pays large, pesticide-intensive companies like Gallo ($4.3 million a year) and Sunkist ($6.6 million a year) to advertise overseas. The same program also pays for notorious welfare gifts like McDonalds' ads for Chicken McNuggets in Russia, and over $1 million a year in pet food subsidies. Tax breaks on ethanol, which big-office donor Archer-Daniel-Midlands enjoys a virtual monopoly on, amount to some $3.6 billion over the last five years.

Coal. This pollution-intensive, $28 billion a year industry gets an estimated $8 billion in annual taxpayer handouts, including research and development and pollution mitigation costs.

Ranching. Like mining and timber, done on public lands for virtually no cost--less than a fifth of what ranchers pay to graze private lands. All on behalf of cows, one of nature's most efficient designs for ravaging rangeland.

Oil and Gas. Once again, public resources given away to private polluters--most recently, the massive National Petroleum Reserve deposits on Alaska's North Slope. Add in $500 million annually in tax breaks, plus all the federally-funded infrastructure costs (e.g., highways) that promote oil and gas consumption.

Health Care. The reason the U.S. has the developed world's most expensive health care, and the poorest public health statistics, is that we insist on putting private profit in the equation. The government helps a lot, underwriting drug research, limiting competition, and winking at an estimated $100 billion a year in insurance-industry health care fraud (by latest GAO estimate). The byzantine payment regulations of the health care world are also rigged for private profit. As one small example of federal largesse, in 1995 Clinton's Dept. of Health and Human Services lifted the requirement of "reasonable pricing" on drugs developed in cooperation between the feds and private industry. This means industries can now charge whatever they want for drugs that were developed with tax money--including charging Medicaid, Medicare, and other federal agencies that are, again, tax-funded. We pay to give them the drug, then we pay again to get it back.

Pentagon Bloat. There's truth behind the legends of $600 Pentagon toilet seats and $7,600 coffee pots. There's also a fuckuvalotta money given away. Or lost--an estimated $15 billion in the last ten years simply can't be accounted for by invoices, $7 billion in purchases never ordered, $8 billion in overpayments, and another $29 billion lost through fiscal mismanagement. Then there are the "tiny" gems: $380 million annually for the Pentagon's "VIP Fleet" to fly important people around; $2 million in 1994 to transport Air Force Adademy cadets to and from sporting events. Oh, we could go on.

Ship Owners. Buried in the Pentagon's budget is a program that provides subsidies to private shipping companies that agree to make their ships available in wartime, at a rate of $3.5 million per year per ship. Annual cost: about $1 billion.

Hydroelectric Power. In addition to killing salmon and finishing off what parts of the Columbia River wouldn't have been deadened by Hanford, the Bonneville Power project (like the TVA and many other utilities) are massively underwritten by taxpayers. Plentiful, cheap water in places it shouldn't be is a massive ongoing subsidy for private developers, making possible, for example, the entire city of Las Vegas.

Communications. The FCC recently wrapped up a deal to give billions' worth of new HDTV television channels, public airwaves, to existing broadcasters--for free. Last year's Communications Act set up the deal, and also give billions' worth of spectrum space to Microsoft and other future purveyors of a real-time video Internet. Alone among Western countries, the U.S. has always treated its radio and TV space (since 1934, anyway) as a gift to corporations, rather than a precious resource for maintaining democratic flows of information.

Sadly, this is by no means a comprehensive overview--just a quick list, with a few examples. That giant sucking sound you hear is coming from your housing and food budget. Happy Tax Day.



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