With unemployment at 9%, Washington needs to invest in jobs. But Tea Party Republicans are demanding trillions in budget cuts - even privatizing Medicare.
Of course we could tax the rich to reduce the debt, but Republicans are adamantly opposed. So here's another option: ending Corporate Welfare.
If we just closed the spigot of dollars flowing to corporate treasuries, hundreds of billions of dollars could be saved - and directed to job creation, protecting Medicare, and reducing the deficit.
We offer a modest menu of corporate welfare cuts that deficit-obsessed politicians can choose from - cuts that would not require a single dime slashed from Medicare, social programs, schools, or other people-oriented investments.
Estimated savings from enacting the whole list: over $2 trillion
End Deferral of Taxes on Income of U.S.-Controlled Corporations Abroad
2011-2015 savings: $199 billion (Citizen for Tax Justice estimate). Encourages off-shoring of work and capital.
End Accelerated Depreciation on Equipment
2011-2015 savings: $141 billion (CTJ estimate). Accelerated depreciation can result in a very low, or even negative, tax rate on profits from a particular investment.
End Deduction for Domestic Manufacturing
2011-2015 savings: $76.7 billion (CTJ estimate). Provides virtually no benefit to the economy and is blatant corporate welfare.
End Last-In, First-Out Accounting (LIFO)
2011-2015 savings: $24.2 billion (CTJ estimate). Corporations use LIFO to hide their true profits.
Cut Subsidies to Big Agribusiness: $52 billion (Taxpayers for Common Sense). Small farms are disappearing while big agri-business racks up huge profits—with corporate welfare support.
Permit Government to Negotiate Drug Prices for Medicare. Savings 2012-2021: $157.9 billion. (Congressional Progressive Caucus). Barring government involvement is an indirect corporate subsidy.
End Tax Breaks For Drug Companies. 2011-2020 savings: $50 billion (estimated based on figures from Rep. Jerold Nadler). Stops a $5 billion-a year annual tax break for direct-to-consumer advertising. We should pay for drug companies to market to us?
Enact A Financial Crisis Responsibility Fee. 2012-2021 Savings: $70.9 billion (Congressional Progressive Caucus). Imposed on largest banks as a repayment of corporate welfare extended via bank bailouts for financial crisis precipitated by banks.
Enact a Derivatives and Speculation Tax. 2012-2022 savings: $650 billion (Congressional Progressive Caucus). Wall Street receives indirect corporate welfare/subsidies via a regulatory system and infrastructure investment for which it pays virtually nothing. A very tiny transactions tax will end the corporate welfare.
Cut Military Budget 2011-2020 Savings: $550 billion (Sustainable Defense Task Force). According to the Task Force, weapons research, development, and procurement activities…“now routinely cost taxpayers over $200 billion a year. Procurement costs are up 110% in real terms since 2000. Setting aside war-related expenditures, DoD “peacetime” spending on research, development, and procurement has increased 75% in real terms.” This focuses only on the Task Force’s cuts that reasonably have a “corporate welfare” component, primarily weapons systems that don’t work and/or aren’t needed to fight an enemy that does not exist.
Do you have other examples of Corporate Welfare? We want to hear from you!