Ever wondered how much is spent annually to feed the poor ‘lazy’ Americans? Three main programs needy families depend upon — Temporary Assistance for Needy Families ($17.3 billion), Food Stamps ($74 billion), and Earned Income Tax Credit ($67.2 billion) — cost $158.5 billion a year. That’s too much for the undeserving citizens who don’t pay taxes, right?
Well, they don’t pay taxes because they don’t have any money since all of the money is on the top. The wealthiest 400 individuals in America own more wealth than the bottom half of the country – a 150 million people. The top 1 % own 40% of the entire wealth of the nation, while bottom 60% own less than 2%.
Despite these shocking facts, tax payers’ money is spent on corporate welfare programs – just 10 of which cost $2.201 trillion a year. This means, America is spending about 14 times as much on corporate welfare and handouts to the top 1% than it does on welfare for working families struggling to make ends meet. Now, that’s too much.
For decades, the federal government has spent many billions of dollars each year on ‘assistance’ to business in the form of grants, targeted tax credits, loans, loan guarantees, and much more. America’s 14 richest individuals made more from their investments last year than the $80 billion provided for people in need of food. In the six years since the recession, for every $1 of safety net costs, $10 in new wealth went to the richest 10%.
Here’s a breakdown of the costliest entitlement programs for the top 1% and how much they cost the rest of the Americans and the middle and lower classes:
Tax Breaks For CEO Bonuses
In 1993, when Congress capped the tax deductibility of executive pay at $1 million, it allowed multinational corporations to deduct performance-based pay – including stock options – from their federal income taxes. The companies have been exploiting the tax-deductible stock options to lower their Internal Revenue Service (IRS) bills. This means that CEOs’ salaries are ballooning thanks to tax breaks that turn rich executive bonuses into government subsidies for corporate America.
According to an Economic Policy Institute estimate, tax-deductible executive compensation cost the federal treasury $7 billion in revenue in 2010 and $30.4 billion over the years 2007-10. The fast-food companies, including McDonald’s, YUM! Brands, Wendy’s, Burger King, Domino’s and Dunkin’ Brands., racked up $64 million in tax savings by giving its CEOs big bonuses.
Tax Cuts For Luxury Corporate Jets
Currently, companies can claim a huge tax deduction every year by writing off purchases of corporate jets, lavish cars, home security systems, 24-hour surveillance, and chauffeurs as “security” for their CEOs. Typically CEOs would have to pay taxes on these ‘benefits’, but if the benefit is classified as necessary for security purposes, “the chief executive will pay a reduced tax bill or sometimes no tax at all”.
Between 2008 and 2011, 26 major American corporations paid nothing in federal corporate income tax, despite making $205 billion in profits. A Bloomberg analysis from 2011 showed that these tax breaks for some of the wealthiest Americans cost the rest of the Americans $300 million each year.
Big Oil Subsidies
New figures from the International Monetary Fund show that the US, which hosted the G20 summit in 2009, gives $700 billion a year in fossil fuel subsidies, equivalent to $2,180 for every American. The world’s biggest and most profitable fossil fuel companies are receiving huge and rising subsidies from US taxpayers. A Guardian investigation of three specific projects, run by Shell, ExxonMobil and Marathon Petroleum, has revealed that the subsidies are all granted by politicians who received significant campaign contributions from the fossil fuel industry. No wonder then for every $1 the industry spends on campaign contributions and lobbying in DC, it gets back $103 in subsidies.
An analysis by the Center for American Progress conveys, the effective tax rate for the top 400 households is lower than for those earning between $74,700 and $102,900, and about the same as that owed by people making between $50,00 and $74,700.
The fiscal cost of taxing long-term capital gains at a low rate amounts to $38.5 billion in fiscal year 2012 and $256.3 billion over the five-year period from fiscal 2012 through 2016. If we taxed wealth like work, the extra $51 billion per year in savings could fund two-thirds of the annual budget for food stamps.
Corporate Tax Subsidies From State And Local Governments
In 2012, The New York Times did an analysis of every existing tax break in each of the 50 states and learned that 1,874 programs cost taxpayers $80.4 billion every year for corporate welfare in their state. The cost of providing tuition-free public college to every student is a mere $62.6 billion.
Isn’t it ironic that the rich complain about entitlement programs that benefit the middle class and poor, when it is the attitudes and policies of/for the rich that have led to an increased need for such programs in the first place?
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