Who Is Robbing America? The 1%. And The 99% Don’t Even Know.

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Ever wondered how much is spent annually to feed the poor ‘lazy’ Americans? Three main programs needy families depend upon — Temporary Assistance for Needy Families ($17.3 billion), Food Stamps ($74 billion), and Earned Income Tax Credit ($67.2 billion) — cost $158.5 billion a year. That’s too much for the undeserving citizens who don’t pay taxes, right?

Well, they don’t pay taxes because they don’t have any money since all of the money is on the top. The wealthiest 400 individuals in America own more wealth than the bottom half of the country – a 150 million people. The top 1 % own 40% of the entire wealth of the nation, while bottom 60% own less than 2%.

Despite these shocking facts, tax payers’ money is spent on corporate welfare programs – just 10 of which cost $2.201 trillion a year. This means, America is spending about 14 times as much on corporate welfare and handouts to the top 1% than it does on welfare for working families struggling to make ends meet. Now, that’s too much.

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For decades, the federal government has spent many billions of dollars each year on ‘assistance’ to business in the form of grants, targeted tax credits, loans, loan guarantees, and much more. America’s 14 richest individuals made more from their investments last year than the $80 billion provided for people in need of food. In the six years since the recession, for every $1 of safety net costs, $10 in new wealth went to the richest 10%.

Here’s a breakdown of the costliest entitlement programs for the top 1% and how much they cost the rest of the Americans and the middle and lower classes:

  1. Tax Breaks For CEO Bonuses

In 1993, when Congress capped the tax deductibility of executive pay at $1 million, it allowed multinational corporations to deduct performance-based pay – including stock options – from their federal income taxes. The companies have been exploiting the tax-deductible stock options to lower their Internal Revenue Service (IRS) bills. This means that CEOs’ salaries are ballooning thanks to tax breaks that turn rich executive bonuses into government subsidies for corporate America.

According to an Economic Policy Institute estimate, tax-deductible executive compensation cost the federal treasury $7 billion in revenue in 2010 and $30.4 billion over the years 2007-10. The fast-food companies, including McDonald’s, YUM! Brands, Wendy’s, Burger King, Domino’s and Dunkin’ Brands., racked up $64 million in tax savings by giving its CEOs big bonuses.

  1. Tax Cuts For Luxury Corporate Jets

Currently, companies can claim a huge tax deduction every year by writing off purchases of corporate jets, lavish cars, home security systems, 24-hour surveillance, and chauffeurs as “security” for their CEOs. Typically CEOs would have to pay taxes on these ‘benefits’, but if the benefit is classified as necessary for security purposes, “the chief executive will pay a reduced tax bill or sometimes no tax at all”.

Between 2008 and 2011, 26 major American corporations paid nothing in federal corporate income tax, despite making $205 billion in profits. A Bloomberg analysis from 2011 showed that these tax breaks for some of the wealthiest Americans cost the rest of the Americans $300 million each year.

  1. Big Oil Subsidies

New figures from the International Monetary Fund show that the US, which hosted the G20 summit in 2009, gives $700 billion a year in fossil fuel subsidies, equivalent to $2,180 for every American. The world’s biggest and most profitable fossil fuel companies are receiving huge and rising subsidies from US taxpayers. A Guardian investigation of three specific projects, run by Shell, ExxonMobil and Marathon Petroleum, has revealed that the subsidies are all granted by politicians who received significant campaign contributions from the fossil fuel industry. No wonder then for every $1 the industry spends on campaign contributions and lobbying in DC, it gets back $103 in subsidies.

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  1. Big Pharma Subsidies

According to an analysis of corporate filings by Health Care for America Now, the 11 largest drug companies took $711.4 billion in profits over the 10 years ending in 2012. The pharmaceutical industry derived much of that profit from price-gouging the Medicare Part D prescription drug program for seniors and people with disabilities; it cost taxpayers roughly $270 billion a year (which comes to $1,914 per household in corporate welfare) as the companies bought patents for drugs that were largely developed with taxpayer-funded research, then jacked up the price by absurd amounts after cornering the market.

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  1. Capital Gains Tax Breaks

According to an analysis by the Tax Policy Center, if capital gains were to be taxed as ordinary income, about 72% of the additional revenue to the government would come from the 0.3% of taxpayers with annual incomes above $1 million. Lower levies on capital gains are the main reason why the wealthiest Americans pay a smaller share of their incomes in taxes than those who earn less.

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An analysis by the Center for American Progress conveys, the effective tax rate for the top 400 households  is lower than for those earning between $74,700 and $102,900, and about the same as that owed by people making between $50,00 and $74,700.

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The fiscal cost of taxing long-term capital gains at a low rate amounts to $38.5 billion in fiscal year 2012 and $256.3 billion over the five-year period from fiscal 2012 through 2016. If we taxed wealth like work, the extra $51 billion per year in savings could fund two-thirds of the annual budget for food stamps.

  1. Corporate Tax Subsidies From State And Local Governments

In 2012, The New York Times did an analysis of every existing tax break in each of the 50 states and learned that 1,874 programs cost taxpayers $80.4 billion every year for corporate welfare in their state. The cost of providing tuition-free public college to every student is a mere $62.6 billion.

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  1. Handouts To Big Agriculture

In 2011, 26 farmers each got an annual subsidy of $1 million; the median income of commercial farm households was $84,649 in 2011 — 70% more than the average American household. In 2013, the US Department of Agriculture spent about $14 billion insuring farmers against the loss of crop or income. The government paid 18 approved insurance companies to run the crop insurance program, farmers to buy coverage and paid the bills when losses exceed predetermined limits. FYI, the farm and insurance lobbies spent at least $52 million influencing lawmakers in the 2012 election cycle.

  1. Welfare For Wall Street

In 2008, big financial companies in the United States were regarded as too important to fail. Therefore they received large amounts of government support, directly from the Treasury, through central banks and in other ways to prevent them from collapsing. The Federal Reserve allowed them to borrow at lower interest rates than other big banks. In 2013, the ten biggest TBTF banks suck up $83 billion per year in corporate welfare.

  1. Export-Import Bank Subsidies

The Export-Import Bank of the United States (Ex-Im Bank), the official export credit agency of the federal government which provides loans to overseas customers of US companies such as Boeing and General Electric, is under severe criticism for favoring special interests ahead of those of the US taxpayer.

In its most recent year, the Ex-Im bank had a $112 billion portfolio, of which $90 billion went to multinationals; ahuge portion of that money went to just 10 wealthy corporations.

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  1. Federal Contracts In Lieu of Lobbying

According to the Sunlight Foundation, the top 200 companies spent a combined $5.8 billion on lobbying Congress between 2007 and 2012. And in those same years, those companies received $4.4 trillion in federal contracts. That $4.4 trillion is $100 billion more than what the US government spent on providing a basic income to the nation’s 50 million Social Security recipients.

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Isn’t it ironic that the rich complain about entitlement programs that benefit the middle class and poor, when it is the attitudes and policies of/for the rich that have led to an increased need for such programs in the first place?


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20 COMMENTS

  1. Welfare assistance to the neediest of families and children has FAILED. We now have 31 million children living in poverty and of those 7.4 million children living on less than $2.00 a day. Not one candidate has addressed this serious situation of Extreme Child Poverty that has put the United States under a United Nations Humanitarian Watch. It is shameful and heinous that our elected officials continue to give trillions to the rich, corporations, and bankers, and let our most vulnerable not cared for. It is shameful and heinous for it would take so little money to help those in need.

    There is an immediate solution to save our children, a Basic Guaranteed Income. Why We Need a Guaranteed Income http://truth-out.org/buzzflash/commentary/on-labor-day-why-we-need-a-guaranteed-income
    How to Fix Poverty: Write Every Family a Basic Income Check http://www.newsweek.com/2014/12/26/how-fix-poverty-write-every-family-basic-income-check-291583.html
    The Federal Reserve gave trillions to the banks, there is no excuse that so little money is needed to bring every man, women and child out of poverty. http://ourfuture.org/20150825/in-troubled-times-the-federal-reserve-must-work-for-everyone
    The New New DEAL: Basic Guaranteed Income – The President can make the Federal Reserve give a basic income to everyone like they gave trillions to the bankers. Federal Reserve (The Fed) instead of raining trillions on the banks, rain billions on the people, issue credit cards for services and food to every American. http://www.nationofchange.org/even-council-foreign-relations-saying-it-time-rain-money-main-street-1409641381
    Republicans Feel No Shame Over Starving America’s Kids To Give Tax Cuts To The Rich http://www.politicususa.com/2015/09/16/shame-republicans-reduce-child-hunger-mission-impossible.html
    TRUTH BOMB – A fact spoken in clear, easy to understand terms and without bias. https://www.facebook.com/groups/TruthBomb/

    • That is communism, anyways the reason communism sucks is not everyone works hard or even works!

  2. I can’t even see the print on the page, this horrible background makes it impossible to see! Was that intentional?
    I was interested in reading this and sharing it, maybe you could fix it so you can actually see the print?

    • You are so thick… Supply can create its own demand. If you had any idea about economics you’d realise that employment depends on output and output depends on both aggregate demand and aggregate supply in the economy. People don’t always know what they want. A company creating an innovative product might make people realise they really want that product and create huge sales and therefore hire a lot of people. If none of the big companies that you’re referring to existed, there would be such little investment and such little tax revenue and employment that everyone would be worse off. As if the economy went back 200 years.

      Also, the only mechanism through which customers can create jobs is demanding products/services from companies. This gives companies profits and allows them to grow, so even if customers are the ones to create jobs, they do so through big businesses.

      • I think he meant that customers create jobs through their buying power. What ever company they buy from will have more money to possibly create jobs with, but the problem with that is that according to this article more money does not equal more jobs. They just give it all to the top execs in bonuses…

  3. 1)Same thing here in europe. Very recognisable.
    2)People keep on voting for the same idiots. Same thing here.
    3)Social political left is seen as undesirable in the US. As a result an US can only vote for a ultra-liberal with some brains (democrats) or ultra$liberal without brains (republicans).
    Bernie Sanders can be the change the US needs, but he has not enough support. Voters are stupid.
    As a result the US is not a free and not a democratic country.

  4. A good place to start would be criminally greedy lower life forms like hedge fund manager Martin Shkreli. Increasing the cost of a 62 year old AIDS drug over 5,000% – from $13.50 to $750 – is among the worst sort of inhuman crimes. We can only hope that Fate decrees that anyone who does something so despicable contract some sort in painful – and incurable – disease.

    • that’s why there is such a thing called capitalism where another company came in with the same drug and charged only a $1/pill. Without capitalism we don’t have freedom to choose. Kind of like Flint water crisis

      • “Without capitalism we don’t have freedom to choose.” I guess this absolutely ungrounded statement is why American’s democracy is often termed capitalist democracy.

      • We have not had capitalism since 1913 when Woodrow Wilson let the federal reserve bank to take root. Yet the ignorant left blames capitalism. This article is intentionally ignoring one issue and pushing another. Welfare all around is poison to capitalism. Encouraging dependence on society is killing capitalism a immune system. A large govt that is co trolled by the banks who print money is just as toxic as this article points out.

    • fuddf, you are so right. The problem people refer to here is that of monopolies/oligopolies. They create market inefficiencies and deadweight loss. Stop blaming capitalism for that. There could always be some form of government legislation which prevents this deadweight loss, so blame your government.

      And stop hating banks and big corporations. If you don’t like them, stop buying cars, fridges, electronics etc.. Stop depositing your money in banks. And stop asking for a mortgage to buy a house. They are offering things that you deem essential to your life when really you could live without them. The people that provide you with them make your lives 10x better. It is only fair that they are compensated for this.

      • sorry, why should we stop hating banks and big corporations for polluting the rivers and land, and stealing money from the public? stopping buying cars and fridges, electronics has nothing to do with banks and big corps specifically. Stopping any of these things is not the answer. The gov’t has to rein in the corruption and pass legislation that protects consumers, instead of removing regulations that screw the people and enrich the banks and corporations. And you have the balls to say that the banks and corps are correct in what they are doing and it is fair and they should be compensated? WTF?!? a blanket defense like you did is the sign of ignorance. Yes, the fridges that some good businesses make do make our lives better, but the corrupt banks and corps make our lives worse. There is good and bad in every aspect of our lives, just like there are good lawyers and bad charities.

        We dont hate banks in general, just the morons in charge of them for being corrupt and corrupting most of the politicians. We dont hate the corporations in general, just the morons in charge of them for making decisions that encourage profit at the expense of society. Banks and corporations are the entities that are causing all of the financial issues in this world and they need to be controlled better…but in a capitalist society, it is hard to do because money is GOD.

        • Your thinking is the problem. You are asking the govt to fix it when the govt is the avenue for the corruption. Govt can not and will not solve the problem as it is the legal tool of those in power to create the problem by concentrating their wealth and rule over the ppl.

      • That is good advice from Colin. The poor should follow it to the word and they will find a way out of poverty.
        !. Stop buying fridge= Will make you eat more fresh produce and it,s quite possible that you FUCKING FINALLY learn to grow your own food.
        2. Unburden Supermarkets = Do not buy pre- cooked. STOP. Save your DOCTOR BILLS means less HEALTH INSURANCE. More HEALTHY people means less depends on the blood sucking doctors.
        3. No Mortgage = You will finally realise that the shackles of the big banks being lifted. Almost like your RAPTOR.. is it? You will breathe and start moving to better locations where water is available and there is land to grow vegetables.
        Ask Racicot for more advice. He is fucking good.

  5. It’s common that the USA rewards hard work. Starting a small proprietary business in Kansas free as a sole ownership. LLC starts at 80 dollars to start. Work hard get an idea and get paid. Some people don’t want to start a business fine work and live within your means. Some of these tax breaks are necessary to keep a large business a float. If they got rid of hourly rates and overtime and go off of a percentage triangle then everyone would actually make more money. Also make things cheaper by putting a price cap on tangible goods. Example if something costs .50 cents to make then it can only be sold at a dollar doubling the worth not let’s make this item cost $49.99. Cracking down on pharmaceutical companies. This would be a good step in fixing our economy.

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