Corporate Welfare

Corporations Are Getting Rich off Government Aid

"I don't understand why money is leaving my pocket and going into the pocket of somebody who is wealthy."

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Congress passed the $2.2 trillion HEROES Act.

House Democrats said it gives money to "governments who desperately need funds."

But it also gives lots of money to people who don't need funds.

Maryland, which even The Washington Post admits is "flush with cash," got enough extra money to pass a budget that "hands bonuses to every state worker."

Even Atherton, California, where the median home price is $6 million, got HEROES Act money.

"There was no means test!" complains Lisa Conyers, author of Welfare for the Rich, in my latest video.

Omni Hotels & Resorts received $68 million in loans. Major airlines got $25 billion in loans from the CARES Act.

"Who wouldn't like to play Santa Claus?" asks Conyers. "Who wouldn't like to just be able to give everybody some money?"

Welfare for the rich didn't start with coronavirus relief bills. Politicians have done it for years, and a pandemic didn't stop them.

Nevada politicians gave Oakland Raiders owner Mark Davis $750 million for a new stadium. A stadium designer says Davis insisted on the very best, including natural grass on a field that "moves in and out of the building in one piece."

Cool. But why didn't Davis pay for it himself?

"I'm not a billionaire," he said.

But he is. The team is valued at more than $3 billion, and Davis and his mom co-own 47 percent of it.

Politicians screw taxpayers to build stadiums for lots of rich people.

Minnesota gave the Minnesota Vikings $348 million for their new stadium. Santa Clara, California, gave the San Francisco 49ers $114 million, plus $850 million in loans. Team co-owner Denise York and her family are worth $3.5 billion, says Forbes. She ought to fund her own stadium.

"The taxpayers often vote for this stuff," I say to Conyers, "so they must like it."

"They're promised there's going to be all these jobs," she replies, "not only at the stadium but at the hotels that are going to rise up around the stadium."

Politicians always promise that public investment will return more in benefits to taxpayers. But it's not true.

A study by the Federal Reserve Bank of Kansas City found new stadiums bring in about $40 million in jobs and tax benefits, much less than the $188 million that taxpayers pay.

Handouts to other corporations fare no better.

Ohio politicians gave General Motors millions in tax credits to keep its Lordstown plant open. GM then closed the plant. Politicians let GM keep a third of the money.

Wisconsin gave nearly $3 billion in tax breaks to Foxconn because it promised to create 13,000 jobs. Now the company promises to create only 1,454.

"If you look at the cost of each job, it was a million dollars," Conyers points out.

Actually, it was more than a million.

Politicians often justify this corporate welfare by saying, "We didn't give cash, just tax breaks."

But "if some big company is in that town and they are not paying property tax, that means every other taxpayer is covering for them," Conyers points out. "Fire departments still have to be paid for. Police departments still have to be paid for. Schools still have to be paid for!"

Then there's the farm subsidy scam.

Both Republicans and Democrats eagerly give your money to agribusiness, even though farmers are now richer than the average American.

The politicians claim the handouts are not a payoff for political contributions but to "make sure there's enough food to go around," since "farmers have no control over price fluctuations and the weather."

But that's absurd. Other businesses adjust to price fluctuations and weather. America doesn't subsidize fruit and vegetable farmers—yet we have plenty of fruits and vegetables.

The politicians claim they want to help "small family farms," but they give 90 percent of the subsidies to the biggest farms.

Such welfare for the rich persists because, years ago, politicians voted for a handout, and once they start giving your money away, they never stop.

"I'm an American taxpayer," says Conyers. "I don't understand why money is leaving my pocket and going into the pocket of somebody who is wealthy."

Me either.

COPYRIGHT 2021 BY JFS PRODUCTIONS INC.

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  1. In the vikings defence the money was used in attempting to build the star wars sand crawler and not a stadium

  2. “I don’t understand why money is leaving my pocket and going into the pocket of somebody who is wealthy.”

    How Laws Are Made and How to Research Them

  3. Thank the gods future generations will get to foot the bill for present day politicians paying off the people that helped get them get elected. This definitely doesn’t feel shortsighted at all…

    1. Good thing we noticed this before it became business as usual. Hopefully we can put a stop to it.

      1. Most likely nothing will happen

    2. Future generations? Try current generation. Inflation is already at 4.2%. I fear it’s only getting started.

  4. Oh dear, even Stossel falls for the taxation myth.

    Politicians often justify this corporate welfare by saying, “We didn’t give cash, just tax breaks.”

    But “if some big company is in that town and they are not paying property tax, that means every other taxpayer is covering for them,” Conyers points out. “Fire departments still have to be paid for. Police departments still have to be paid for. Schools still have to be paid for!”

    Look, if someone gets a tax break, no one else’s taxes increase as a result of that tax break. We had this discussion yesterday about the SALT deduction. This is the false zero-sum thinking about taxes.

    If Alice and Bob are both taxpayers in a certain city, and Alice’s taxes go down, it does not mean Bob’s taxes go up. Now, if that city decides to give Alice a tax break, while also keeping spending the same, and then gets to the end of the fiscal year and realizes “holy cow we don’t have enough money to cover all the spending we agreed upon, so we have to raise the tax rates next year to cover the shortfall”, then that is because the city didn’t change its spending behavior even though they knew they were going to get less revenue as a result of Alice’s tax break. OR, it could have been that Alice’s tax break really did generate enough economic activity to generate more tax revenue overall, so that the city runs a surplus and decides to LOWER taxes in order to give a rebate. Of course the zero-sum tax crowd is loathe to give Alice credit for that, however.

    There are plenty of reasons to be opposed to taxpayer-funded stadiums. They are absolutely examples of crony capitalism at work. It is obscene and offensive that rich team owners shakedown average taxpayers for money to pay for their lavish stadiums. But the false “they got a tax break waa waa it’s not fair that means I have to pay more” argument is not one of them.

    1. Tony logic: not taking is giving and not giving is taking.

      1. Go back and read the article on the SALT deduction yesterday and note how many of our right-wing heroes were using “Tony logic” to defend eliminating the SALT deduction.

        1. I did a brief perusing and yeah, it’s pretty sad.

          Principals, not principles.

          Trump succeeded in transforming cognizant conservatives into emotive trash, just like the people they hate.

    2. If a tax break is not universal, then it is the same as a gift. It is the government playing favorites, and effectively transferring wealth from one citizen or entity to another.

      1. A tax break to a particular individual IS the government playing favorites. Yes. That is the cronyism.

        A tax break to a particular individual IS NOT “transferring wealth” from one to another. That is the false zero-sum thinking about taxes that I am arguing against.

        1. Tony logic: not taking is giving and not giving is taking.

        2. It is a transfer of a liability from one citizen to another. A negative wealth transfer, if you like.

          If the amount of government spending is fixed, then we are in fact working in a zero sum scenario. The only way an entity-specific tax break is not effectively a wealth transfer is in a pay as you go system or fee, and then we aren’t really talking about a tax break, but more of an opt out system.

        3. In other words, it’s only fair that I pay *your* fair share.

          1. It’s not about what is fair or unfair. It is about reality. If taxes go down for one person, it does not mean that taxes necessarily go up for another person. Complain all you want how unfair (or not) it is that taxes go down for one person and not another. But it is simply not true that someone’s lower tax burden means someone else’s tax burden got higher.

      2. So if I show up to your door, point a gun at your head, and demand everyone except Joe empty their wallet into my bag, is Joe receiving a gift?

        1. Effectively, yes.

          You would certainly have some questions for Joe after the robbery.

          1. What happened to Joe was unfair to the rest. Yes.

            What happened to the rest was unjust.

            Joe not being a victim of injustice doesn’t mean he owes those who were.

      3. And besides DOL you are supposed to be my sock. Why are you arguing with me?

        1. No shit! Three of us at the same time! JesseAz’s gonna link this as proof we’re all the same person!

          And nobody will see because they muted him, lol.

        2. I’m a stickler for the absolute truth found in math.

          I understand that not taking and giving are different concepts. But when the favored stadium owner’s accountant reconciles the bottom line, he does not care, nor does the bottom line reflect a difference between taking and not giving.

          Think of “A Penny saved is a penny earned.” Same mathematical truth.

          1. Economics isn’t zero-sum math.

            1. Sometimes it is. Like when government spending does not fluctuate with tax receipts and you tax various entities unequally. There is a bill at the end of the year, and certain entities not having to pay as much as others means that the payment or debt liability is assigned in greater proportion to the other entities.

              Think of a dinner with a big group. If one person gets to skip their payment, then you and everyone else will have to pay slightly more or owe slightly more. Whether or not payment occurs right then or a debt liability is assigned is immaterial. The scenario is fixed, or zero-sum.

      4. This dumb asshole above you thinks that only leftists think taxes should be fair. Of course he is the one that gets to define fair.
        Didnt libertarians come up with the flat tax idea? That residents of some states have to pay less federal tax, because their states make terrible spending decision and tax them through the nose is indeed not fair. Since lefties hate federalism and think states should come second, we should probably deduct federal taxes from state income taxes instead.
        No chemmie, we shouldnt repeal the SS cap, because the benefits are also capped.
        I dont remember your other stupid example, but I did remember thinking that yes, we should repeal, but not for the reason you put out.
        Ken is 100% right about cj

    3. I have to disagree. The problem is that to cover tax breaks given to one group others must cover the cost. Very often the cost is covered by raising debt which is essentially moving the taxes to the future. There may be benefits to giving tax breaks but it is a form of spending and all spending must be justified.

      1. Balanced budgets is a communist policy, according to the current crop of pseudo libertarians. It’s hard to keep up with their hand curated truths.

      2. The problem is that to cover tax breaks given to one group others must cover the cost.

        ONLY IF there is no concomitant change in SPENDING. THAT is the culprit here. Not the decision to charge less in taxes to some.

        1. And what we have seen from both parties is a failure to change spending.

    4. It depends on where you are. In illinois, you’re actually taxed for property *after* they determine how much they’re spending. (Property taxes in Illinois are for *last year*, not this year – they already know how much they spent, and that total is divided up among the taxable property).

      So yes, giving someone an exemption directly increases taxes for everyone else in that situation, because it is explicitly zero-sum.

    5. Here in the real world, spending rarely (if ever) goes down. So what happens is Alice being politically connected keeps her tax break and Bob, being a middle class schmuck with no political clout, has has taxes raised to cover the short fall.

      So while taxes aren’t technically a zero sum game, the government is doing its level best to make it one.

    6. If Alice’s taxes go down but Bob’s don’t and spending stays the same, then that means increasing debt, and Bob will have to pay for that.

      In addition, such policies violate equality under the law.

    7. The real issue is control. Since the 12 big banks cartel established in 1913, is the real issue. Central control, even if it has totally altruistic goals, can not and will not solve problems at local levels. The Federal Government is controlled by the Federal Reserve, Big Business and the most powerful people in the world, not the American People.
      Why is this so? Propaganda. Samuel Clemmens once stated, “…there are lies, damn lies and newspapers.” Sam was a newspaper man and more famously known as Mark Twain, who some believe is America’s greatest writer. In our current age, media is overwhelmingly controlling many ignorant or uncaring people. Six people control almost all of what you see, hear and read. When truth is really published by small time reporters, it is often dismissed by the corporate media as ‘fake news’.
      In short, big money controls, it does this thru controlling the law makers which spew the false narrative influencing voters to vote for their own demise.
      I like the Austrian model of economics which basically indicates that a true free market system would operate best without laws. This assumes honest and considerate peoples which is never the case. Some will always cheat, steal etc so some laws are required.
      The best mankind can do is offer a money system not controlled by anybody or group. This is hopefully possible with crypto currencies. Cyptocurrencies offer unrestricted possibilities with creative finance, ease of money transfers in business and a non-inflationary money system. Inflation is the key to creating an elite control of the populace. The Federal Reserve is a money laundering cartel which ruins the host they feed upon.
      The Big Bankers are responsible for the rise of Communism. Follow the money, Lenin, Trotsky et al were funded by the big banks.
      Talk about any ‘ism’ you want, a monopolistic entity is a tyrant. Monopolies lead to everything you do not want and is not freedom friendly. Censorship has always been with us but it is now more severe than ever in the USA. Like him or not, censoring a former President of the United States is a very bad precedent.
      If you follow the money, you can see that the COVID-19 pandemic was a ploy to destroy small business, confine and control the population and silence dissent, all for the riches of people who are evil even if they do not know it. Mask makers, drug makers and big businesses are profiting.
      Talking about welfare for the rich! How’s about them vaccine makers? Vaccine passports!? What better business is there than having the governments of the world pay for the world to be vaccinated! And the governments take the common mans money, time and efforts in this ultimate tyranny!
      Health is far more complicated than ‘kill the bad germ!’ From the very beginning vaccines have had a sorted history and there is no proof they work!
      There has always been a great way to extort money from people. Threaten them with death, in the past that was war but since we can now destroy the earths habitat for humans in a moment the rulers of the world has resorted to propaganda, drugs and fear.
      Do not fear, make your food your medicine and ignore all the mainstream media. Then, and only then, you may begin to live life better and crypto-currencies offer some hope in doing so.
      Also, do not vote for any new taxes, vote for freedoms to thrive for there is no ‘free lunch’. Someone always pays and it is always the common peoples.

  5. Thanks for noting that much of this money is given as tax breaks. Far to often the idea of giving tax breaks is promoted as not really giving businesses money. The fact that tax breaks are a subsidy as much as direct funds. The money is either made up by taxing others more or more often shift the taxes to future generations.

  6. Corporate welfare? Well I NEVER!!!

  7. “Corporations Are Getting Rich off Government Aid”

    You would think that cronyism – locally, statewide, and nationally, would be enough to keep them in the black, no?

    1. They still have to compete for the best lobbyists, however.

      1. True.

  8. >>Congress passed the $2.2 trillion HEROES Act.

    taxation is theft. repeal the 16th. and 17th. and 18th oh wait.

  9. We have tunnel vision about the true scale and scope of government. Many that are as much government dependents as are welfare recipients or government employees are not seen as such due to our tunnel vision. We have a parasitic Government Class bleeding the true private and productive sector pale, if not quite completely dry.

    Money, leisure, and power the Government Class is looking very like the old aristocracy, and We the People their serfs.

  10. It floors me the USA has gotten so far off track we are now arguing about “fair share” government money redistribution!!!

    WHEN DID THAT HAPPEN!!! I didn’t get the memo about the USA being taken over by communists.

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