Sunday, August 06, 2006

Big, Inc. – Pigs at the Trough

Caution: This will not be your typical missive railing against welfare recipients living in mobile homes on the outskirts of town claiming 341 dependents, nor will it be a brutal flogging of the few deadbeats who have figured out a way to beat the “welfare to work” initiative that has dramatically reduced the welfare rolls of the poor in America.

No, today our focus is on welfare for companies who have found their own 341 dependents for which the government will pay. Collectively, corporate America rakes in more in subsidies and tax benefits than paid for the core programs of the social welfare state: Aid to Families with Dependent Children (AFDC), student aid, housing, food and nutrition, and all direct public assistance (excluding Social Security and Medicare.)

These are the pigs at the trough. Collectively, they make up Welfare, Inc. They are on the dole. For this group, welfare began as accelerated tax deductions, morphed into subsidies, bailouts, giveaways, loopholes, debt revocations, loan guarantees, discounted insurance, and taxpayer extortion, just to name a few.

Television broadcasters were given control of a digital television spectrum worth $70 billion. Mining companies pay pennies per acre for valuable mining land which, if auctioned off, would net billions. Accelerated depreciation has provided big oil a porker infusion of tax benefits resulting in record profits. Federally subsidized electricity holds down the costs of running ski resorts in Aspen and gambling casinos in Las Vegas. The U.S. Forest Service has built 340,000 miles of roads in the last 20 years -- more than eight times the length of the entire interstate highway system -- primarily for the benefit of logging companies. Billionaire sports team owners pay for their new stadiums and arenas with tax dollars, often with the support of local politicians who receive donations to support math that never works out, except for the billionaires. Both political parties are culpable – all are pigs at the trough, too -- soft money and contributions from “employees” who have been leaned on by their employers to give to the “right” causes.

Corporate welfare has become so endemic that the equality that once existed in the tax code between corporations and individuals has been turned on its head. Today, says the U.S. Office of Management and Budget, the corporate share of income taxes has declined to a fourth the amount individuals pay.

But, welfare for the rich isn’t only for “Big, Inc.” The individual rich have their heads deep in the government feed bucket, too, and apparently intend to keep it there. The recent bill in Congress to raise the minimum wage, something that hasn’t been accomplished since 1996, is but one good example. It was held hostage, and ultimately killed last week, by those who made its passage contingent on the elimination of the inheritance tax – a bill that would have dumped cash by the carloads into the coffers of the wealthiest 1/2% of the population, those who need it least.

The situation sounds grim mostly because it is. Yet, all is not lost. When the most flagrant abuses are revealed, they can be dismantled. A good example is the “dead animal” loophole in the tax code, exploited by trophy hunters, one that allows those who define “sport” as taking a high-powered rifle and scope and blowing the brains out of helpless animals. Then, for good measure, they deduct these “adventures” by “donating” their “prizes” to “museums.” This swindle has cost the American taxpayer hundreds of millions of dollars, not to mention openly encouraging the slaughter of endangered species.

As the result of efforts by organizations like the Humane Society of the United States, these “donors” of animal carcasses to “museums” (many of which are set up in the hunters’ own living rooms), are now being investigated by the Internal Revenue Service. Indictments have been handed down for tax fraud and some of these brave bwanas will end up crying like babies in federal prisons for good reason. Hopefully, their notoriety will result in the exposure of other welfare scams.

To be fair, not all corporations or members of the gentrified class take government handouts. Prescient corporate leaders take social responsibility seriously, to include leaders of companies like Starbucks which has focused on the environment, Costco which has proven that paying a living wage doesn’t mean being uncompetitive, (regularly whipping their Wal-Mart competitor, Sam’s, in every meaningful metric.) Target is another example, donating more than $2 million a week to charities in the communities in which they do business. Build-A-Bear Workshop’s foundation donates more than $1 million a year to the cause of animal welfare, and companies like Intel, Herman Miller, Timberland, Cisco Systems, Southwest Airlines, Merck, and Medtronic, also have done the right thing.

So what? Who cares?

A growing number of people care, including investors and employees. In a recent survey, 73 percent of workers said it was "very important" to work for a company they believe is "socially responsible,” and 35 percent have reported actually leaving a company because they believed it was not socially responsible, that it was not doing the right thing.

A few corporate leaders have even expressed outrage against corporate welfare arguing that it creates an uneven competitive playing field and an unhealthy, incestuous relationship with government. They are right. This kind of introspection is what we need if corporate America is to repair its tarnished image of well-dressed thugs with nothing in mind except waddling up to the trough of government giveaways for the sole purpose of getting richer, regardless of the costs to society.


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