Corporate welfare is far more costly than we thought. Writer Paul Bucheit estimated that direct and indirect subsidies to large corporations take $6,000 a year out of the average family’s bank account.
The payments to big businesses from the average household making $72,000 a year include:
- $870 worth of direct subsidies and grants to companies. The figure is based on work by the Cato Institute. This is cash directly paid to corporations by the federal government.
- $696 in “incentives” that state and local governments give to large corporations. The incentives are mostly tax breaks for everything from movie production to building big box stores. This estimate is based on a New York Times investigation that found corporations received $80.4 billion worth of such incentives. Times reporters believe the actual value of such incentives is much higher.
- $722 in interest rate subsidies for banks (which already receive 83 billion in taxpayer funding as reported by Anthony Gucciardi)
- $350 in bank fees related to retirement funds.
- $1,268 because of needless price increases on prescription drugs. The price increases are created by patent monopolies granted to large pharmaceutical companies that stifle competition.
- $870 in additional taxes to make up for tax breaks given to large corporations.
- $1,231 to make up for tax revenues companies and wealthy individuals didn’t pay because they keep money overseas in so-called tax havens.
TRUE COST OF CORPORATE WELFARE MUCH HIGHER
The really bothersome aspect to this story is that Bucheit’s estimate is probably too low. The actual cost of corporate welfare could be much higher because he only counts direct and indirect subsidies.
He doesn’t add government contracts, government purchases of goods from corporations, low fees on mining claims and government services, and free services the government provides to business. Nor does he mention corporations that benefit from welfare programs, such as retailers whose low-paid workers receive food stamps.
The true cost of corporate welfare is high and growing every day. Unfortunately, Congress doesn’t seem to be dedicated to curbing this outrage only in giving more of our money to big business and the rich.