Every year, the average American taxpayer shells out more than $1000 in federal income taxes so the government can keep some very important taxpayers on welfare. Those taxpayers are better known as corporations, and according to a trenchant series in Time magazine by investigative reporters Donald Barlett and James Steele, a privileged group of well-connected and savvy businesses milk $125 billion a year out of the U.S. Treasury in grants, subsidies, low-interest loans, tax credits, exemptions, deductions and deferrals.
Unlike welfare for poor families, which is limited to five years and requires recipients to search for jobs, there is no limit to how long corporations can collect their benefits and no obligation that recipients produce jobs. In fact, some of the biggest corporate welfare kings have spent the last few years eliminating hundreds of thousands of jobs, while continuing to enjoy government succor.
To take just one current example, the Boeing Company has just announced that it will be firing 28,000 workers on top of 20,000 job cuts announced earlier this year. According to Barlett and Steele, the Export-Import Bank of the United States has subsidized $11 billion worth of Boeing's aircraft sales from 1990 to 1997. The giant company has also escaped payment of hundreds of millions in federal income taxes by setting up what is essentially a dummy corporation overseas, with official government encouragement.
Why is it so hard to end corporate welfare, at a time that needy Americans are told that there isn't enough money to rebuild schools, guarantee health insurance, or make it easier to buy a home or pay for college? Well, of all the economically-interested money given to congressional candidates or presidential contenders, almost none comes from the millions of Americans who send their kids to public school or lack health insurance. Boeing, by comparison, was #23 among the top overall contributors in 1997-98, giving a total of $1,349,008 in individual, PAC and soft money.
But the resilience of corporate welfare can't be explained solely by looking at a few companies' campaign finance activities. Eighty percent of the money given to congressional candidates by individuals comes from just one-quarter of one-percent of the population. According to a recent survey of these donors, a mind-boggling eighty-one percent of these people make more than $100,000 a year--compared to just five percent of the overall population. The donor class is also the stock-owning class. According to the Federal Reserve, while six out of ten Americans own no stocks, of the people who make more than $100,000 a year, 84 percent own a lot of stocks. And as corporate welfare has the effect of fattening the bottom line of many big companies, those benefits trickle up to their shareholders--the same people who provide most of the financing for campaigns.
