There is a lot of talk from conservatives about how the social welfare system in this country is robbing taxpayers of their livelihoods. But what they do not typically consider is the substantial amount of government subsidies (or corporate welfare) that their beloved corporations receive.
Corporate welfare is defined as any federal spending programs that provide payments or unique benefits and advantages to specific companies or industries.
So let us compare the two, Corporate Welfare vs. Social Welfare. Before we look at the details, let’s look at the overall cost. 59 billion is the overall cost against the government/taxpayers spent on social welfare. Seems like a lot at first, and we can see how this can be a legitimate concern for government spending. However compared to the whopping 92 billion spent on corporate subsidies, we can see where we should really be pointing the finger. Now before we discuss numbers, remember these are profit-based corporations, entire for-profit entities whose sole purpose is to generate revenue. So why would these so-called “private enterprises” need so much public sector help? It’s not as if these supposed sovereign industries are needy individuals with a beating heart and soul.
Why an individual needs government assistance is easier to understand for a number of reasons; disability, job loss (often because of corporate layoffs), and income assistance because they just don’t get paid enough. The nature of capitalism is to squeeze employee wages as dry as possible to increase the capitalist’s return. When this happens it is left to the population to make up the difference for the wages and well being that corporations often short their employees. Walmart, for example, employs more employees on government assistance than any other employer. A simple solution would be to pay employees more so they no longer need government assistance, reducing social welfare cost for the taxpayer. However, that is not in the interest of for-profit companies who’s sole purpose is to maximize profit for shareholders. If a company can depend on the government to take care of remaining payments to their employees, they will. That’s cost effective and again that is the nature of capitalism, exploitation, its only natural.
Why a corporation needs so much government aid may be a little less clear. Number one, corporate welfare or tax breaks. It is widely understood that corporate tax breaks may stimulate American job growth which is in turn better for our economy. The idea is that if we make incentives for them to create jobs here, then we won’t have to worry about them shipping our jobs overseas…right? But how many tax breaks do they need? From 2008-2010 the top 25 corporations paid in an average -6.7% tax rate, this means that they are getting such great tax breaks that they are receiving rebate checks from the federal government each year. General Electric received a negative tax rate of -45.3% alone, this is attributed to industry-specific tax breaks, in this case for energy. Energy tax breaks make up for 15 billion of the 92 billion spent on government subsidies. Also, tax loopholes are taken by these corporations to avoid any tax payments that may still remain after the massive tax breaks. The kinds of loopholes individuals and smaller companies can’t afford to make.
When we favor corporate welfare over social welfare we all lose. Personal tax rates are stagnating and corporate tax rates are at an all-time low due to bush era economics and the principals of Reaganomics. This leaves us, as the individual, the poorer individual, to pick up the pieces (since high-income Americans pay an average lower rate than middle-class Americans.) Not to mention the disadvantages small business owners get into when corporate welfare wins. With taxes such as the payroll tax, we are able to keep the little social welfare we have afloat. But with this, only those who receive a paycheck contribute, high-income earners, like CEOs, get compensated in more devious ways. So who’s really government dependent? The corporations or the people?
“The real difficulty is with the vast wealth and power in the hands of the few….It is a government of the people, by the people, and for the people no longer. It is a government of corporations, by corporations, and for corporations.”
— Rutherford B. Hayes