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Reich writes: "You often hear Trump and Republicans in Congress railing against so-called 'welfare programs' - by which they mean programs that provide health care or safety nets to ordinary Americans."

Robert Reich. (photo: Getty)
Robert Reich. (photo: Getty)

How Corporate Welfare Hurts You

By Robert Reich, Robert Reich's Blog

18 July 19


ou often hear Trump and Republicans in Congress railing against so-called “welfare programs” – by which they mean programs that provide health care or safety nets to ordinary Americans. 

But you almost never hear them complaining about another form of welfare that lines the pockets of wealthy corporations. We must end corporate welfare. Now.

There are several ways corporations get rich on the taxpayer’s dime. The most obvious comes through subsidies or tax breaks for certain businesses or industries.

Consider the fossil fuel industry, one of the most profitable and privileged sectors of the economy. Every year, oil companies get to deduct millions of dollars from their tax bills for the cost of new wells, oil exploration, and other drilling and mining expenses.

It’s been estimated that repealing these special tax breaks would save taxpayers $39 billion over 10 years.

Other examples of corporate welfare include billions in government subsidies for agricultural conglomerates, pharmaceutical makers, tech giants and defense contractors

Other industries don’t get these benefits. Meanwhile, most families don’t even benefit from tax credits and deductions for childcare.

State and local governments are also handing out corporate welfare, often with no strings attached. In 2013, for example, the state of Washington approved a record $8.7 billion handout to Boeing in order “to maintain and grow its workforce within the state.“ What did Boeing do? In the following years, it laid off more than 12,000 workers in the state.

State and local tax breaks for corporations are estimated to cost local schools almost $2 billion a year in lost tax revenue. 

It’s argued they create jobs, yet nationwide, not a single new job is created. At most, the jobs are merely moved from state to state.

How do corporations get this corporate welfare? Follow the money. They spend hundreds of millions on lobbying and campaign contributions.

An even more insidious example of corporate welfare occurs when corporations don’t pay their workers a living wage. As a result, those workers often have to rely on programs like Medicaid, public housing, food stamps and other safety nets.

Which means you and I and other taxpayers end up subsidizing these low wages so those corporations can enjoy even higher profits for their executives and wealthy investors.

For example, every year, Americans spend an estimated $153 billion in taxes and on programs to subsidize McDonald’s and Walmart’s low-wage workers.

Here’s the bottom-line: When corporations get special handouts from the government, it costs the rest of us. We have to pay more in taxes to make up for these hidden tax breaks, subsidies, and loopholes. In turn, there’s less money for good schools and roads, Medicare and national defense, and everything else we need.

So the next time you hear conservatives railing against welfare handouts for the poor, remind them that we should really be cutting corporate welfare – unnecessary and unwarranted aid for dependent corporations.

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+23 # DongiC 2019-07-18 09:52
If you cut their subsidies and special tax deals, these corporations will label you a socialist or worse, a communist.
There is such power in mere words especially when they are used to hide and conceal.
+14 # Robbee 2019-07-18 09:58
How Corporate Welfare Hurts You
By Robert Reich
18 July 19

- H A T S - O F F !

robert! NO repuke voter gets this!

MANY dem voters need this re-explained!

how did we get here? where america doesn't get it?

how does it help the common human? for their candidates for public office, to take almost all of their campaign funds from corporations? to dine, drink and party exclusively with lobbyists?

to perfectly-well hear corporations? on every topic that affects humans? for good and adversely?

and be tone deaf to human suffering?

lets call it what it is! RIGGED!
+14 # Rodion Raskolnikov 2019-07-18 10:58
What Reich says is the truth. Corporations and individuals get wealthy mostly through government policies, especially tax policies. A decision was made in the Reagan presidency to shift the burden of taxes from corporations and wealthy individuals to the middle class. The reason for this?? The wealthy are the creative class. They create growth and wealth and when they create a lot some of it trickles down to the middle class. So, Reagan and his neo-liberals geniuses told us, the middle class would benefit in the end.

In reality, we got fucked by Reagan's neo-liberalism. But somehow he made it the central planning doctrine of the US. All presidents who followed him have amplified what he begun.

We have a chance now to change the Reagan juggernaut in the 2020 elections, if we will only concentrate on the analysis Reich gives above and stop getting distracted by Russiagate, Mueller, Trump's vile tongue, and all the rest. "It is the economy, stupid." And in truth, Americans are stupid . The react to the idiocies that come from the billionaire corporate media and not to facts of their own lives. They are working more now and being paid less and less (in real dollars or spending power). But so what if someone can't buy a house or can't pay college debt. There's always Trump to curse.
-1 # Robbee 2019-07-18 14:00
Quoting Rodion Raskolnikov 2019-07-18 10:58:
stop getting distracted by Russiagate

- comrade! you and dickhead are quite the pair!

what's russia got to do with anything?

the poor people of russia only do what they are told! BY PUTIN!

but you? who else here calls putin's puppetry of dickhead "russiagate"?

but you? some dems can walk! and chew gum! at the same time!

alexandria! and 20 dem candidates for prez, including bernie! elizabeth! do it every day!

only for you! comrade! and putin! is this path too challenging!
+2 # Rodion Raskolnikov 2019-07-19 05:56
Robbee -- I only said that the investigation of Russian meddling in the US election of 2016 which has dominated the last 2 1/2 years has been a great distraction for the media, congress, and many people. We should have been talking about the issues Reich raises.

The first lesson of democracy is that there needs to be massive public discourse to propel policy changes. People learn how to talk about a subject and certain ways of talking become commonplace. This happened for Russiagate. Just the commonplace of the talk has made a lot of people believe in it. We need this for major revisions in the laws regulating our economy. See the article on E. Warren here on RSN. She gets it.

Finally Trump is not a Putin puppet. He is a puppet of Israel and US corporations.
0 # Robbee 2019-07-20 18:31
Quoting Rodion Raskolnikov 2019-07-19 05:56:
Robbee -- I only said that the investigation of Russian meddling in the US election of 2016 which has dominated the last 2 1/2 years has been a great distraction for the media, congress, and many people. We should have been talking about the issues Reich raises.

- this is all disingenuous bullshit!

the dem house hold FREQUENT policy hearings! supported by VOLLEYS of policy testimony! and, PASS RAFTS of policy bills WHILE YOU ARE NOT LOOKING!

it's NOT the dem house's fault that YOU PAY NO ATTENTION! - IT'S ALL ON YOU! FOOL! - OWN IT!

* you note - "Finally Trump is not a Putin puppet. He is a puppet of Israel and US corporations."


dickhead uses israel and ceo's to get what he wants, and vice-versa! - pure coincidence?

and, what he wants, putin gets from dickhead! - just another coincidence?

if you have a case that dickhead is not putin's puppet? MAKE IT! - DON'T DUCK THE ISSUE BY REFERRING TO ISRAEL OR CORPORATIONS, THANKS!
+4 # Rodion Raskolnikov 2019-07-19 08:24
Robbee -- "some dems can walk! and chew gum! at the same time!"

yes, that may be true. But only for gum and walking. They don't seem to be able to demagogue the Mueller fiasco and fix the crisis at the border at the same time. They have chosen to demagogue Trump and ignore the simple fix to the border crisis.

Julian Castro has the fix -- repeal Section 1325 of the US Penal Code. Here --

"Section 1325 of Title 8 of the U.S. Code makes it a crime for someone to enter the U.S. somewhere other than an official port of entry. It’s what makes crossing the border without authorization illegal — specifically, a misdemeanor; re-entering after being deported is a felony — and it dates back to a low point in U.S. immigration history.

“The reason they’re separating these children from their families is that they’re using Section 1325 of that act, which criminalizes coming across the border, to incarcerate the parents and then separate them,” Castro said, referring to the 1924 Immigration and Nationality Act. “Some of us on this stage have called to end that section, to terminate it. Some, like Congressman O’Rourke, have not, and I want to challenge all the candidates to do that.”

We've decriminalized pot in many states, why not decriminalize border crossing? Oh, you'd have to think of something else to do with immigrants. Can't do it. Chewing gum.
+8 # chrisconno 2019-07-18 12:10
A few years ago the New York Times threatened New York City with the possibility that they were going to move their offices someplace else. So the city gave them $5million to stay. The New York Times never even moved a stick of furniture. I think of it as extortion.
+3 # Rodion Raskolnikov 2019-07-19 05:58
cc -- yes, it happens all the time. Bezos just extorted Alexandria, VA, for over a billion dollars.
+8 # revhen 2019-07-18 17:49
Only those who can help the rich get richer deserve to live. The rest would do the rich a favor by dying.
+5 # DongiC 2019-07-19 01:16
Yeah, but then who would do the stoop labor (picking the foodstuffs) and the grunt work of our society? The rich require at least a minimum of the poor.

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