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Friday, May 6, 2016

Corporate welfare and profits

I'm more of a moderate when it comes to welfare. I've been on welfare myself, I've been homeless as a kid. It's not fun. But I'm not for giving away free money, we've already seen that doesn't significantly reduce the welfare rolls since 1980. I'm for working for welfare, as in a jobs program. I used to take advantage of a state jobs program, and I was very grateful for it. I was able to sacrifice and save for college to get myself out of poverty.

There are different ways to count personal welfare usage.

  1. Some say that if one person in a household gets any welfare at all, all people in the household are counted, adults and children. That's where the 35% on welfare number comes from. 
  2. Some only count the percent of the US population that are on only a few programs. 
  3. Some count unemployment as welfare, some don't. 

Percent of families on Temporary  Assistance to Needy Families (TANF) and General  Assistance (GA). From PDF page 5.
  • Year 2000: 2.6%
  • Year 2012: 2.9%

Above, poverty since 1947. Look at supposed "welfare reforms" since 1980.

Above, the poverty rate and spending per person. From Federal Safety Net. As spending per person has gone up, the poverty rate has remained much the same.

Above: US Participation in Medicaid, Supplemental Nutrition Assistance Program, housing assistance, SSI, Temporary Assistance for Needy Families, and General Assistance, 2009-2012.

Some of the corporate welfare programs I've found, from most amount to least.
  1. Writing off CEO bonuses. $70 billion a year. 
  2. Tax cuts for luxury corporate jets. $300 million a year. 
  3. Big oil subsidies. $37.5 billion a year. 
  4. Big pharma subsidies for mega profit corporations. $270 billion a year. 
  5. Capital gains tax breaks. $51 billion a year. Cap gains are taxed a a lower rate, if you sell a stock or mutual fund, and have a capital gain. Every day Joe cannot afford to pay more on these as he buys and sells stocks in his retirement account. But millionaires can certainly pay more. They already have plenty of money to buy the basic necessities of life. 
  6. Tax subsidies from local and state governments. $80.4 billion a year. 
  7. Big agriculture subsidies. $18 billion a year. 
  8. Wall Street Welfare. $83 billion a year. 
  9. Export/Import subsidies. $112 billion. 
  10. Federal contracts to top 200 biggest companies. $880 billion a year. 

What's the total of only these biggest subsidies? $1,602.2 billion dollars a year. 3 welfare programs only cost $158.5 billion a year. Corporate welfare gets 10x that amount. What if we gave every man, woman and child a piece of corporate welfare (population 319 million)? They would get $5203 per year every year. That's not enough to survive on but it's enough to give you an idea of the amounts of your tax dollars not going to most of the citizens.

Who are the biggest corporate welfare queens?

Corporate welfare can take the form of special tax breaks, or subsidies.

Company (symbol) Welfare Recent Net Profits (millions $)
Boeing (BA). Makes airplanes, contractor for Defense Dept. $13.18 billion. $5176 million, 12 months ending 12-31-2015
Alcoa (AA). Largest producer of aluminum. $5.64 billion.  $-322, 12 months ending 12-31-2015.
Intel (INTC). Makes computer chips. $3.87 billion.  $11,420, 12 months ending 12-26-2015
General Motors (GM). Makes automobiles. $3.58 billion.  $9687, 12 months ending 12-31-2015
Ford (F). Makes automobiles. $2.52 billion.  $7373, 12 months ending 12-31-2015
Fiat Chrysler (FCAU). Makes automobiles. The Fiat Chrysler financials site only goes up to 2013. $2.06 billion.  $344, 2015 from Marketwatch,
Royal Dutch Shell (RDS.A). Oil company. $2.04 billion.  $1939, 12 months ending 12-31-2015
Nike. Makes shoes. Shoes? Really? Is that really a matter of national security?$2.03 billion. $3273, 12 months ending 5-31-2015
NOTE: Preferred stock symbols used are from US NYSE or OTC.

What's the biggest corporate welfare by US gov't department?
  1. Dept of Agriculture: $25.165 billion
  2. Energy: $17.330 billion. 
  3. Other agencies, applied R&D: $17.094 billion. 
  4. Housing: $16.041 billion
  5. State: $5.201 billion
  6. Defense: $4.737 billion.
  7. Commerce: $4.095 billion
  8. Other agencies combined: $3.347 billion.
  9. Interior: $2.608 billion. 
  10. Transportation: $2.024 billion. 

Total: $97.642 billion

Do all these companies with mega profits really need all this welfare? Would the welfare office give an individual making $100,000 a year food stamps? I think not.

  1. Becker, Sam. The 8 Biggest Corporate Welfare Recipients in America. Cheatsheet. May 07, 2015.
  2. Cahill, Tom. 10 Taxpayer Handouts to the Super Rich That Will Make Your Blood Boil. October 28, 2015. Link here.
  3. Corporate welfare by US gov't department. 2012. Link here.

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