By Paul Bucheit
The Average
American Family Pays $6,000 a Year in Subsidies to Big Business.
The average American family pays $6,000 a year in subsidies to big
business. That's over and
above our payments to the big companies for energy and food and housing and
health care and all our tech devices. It's $6,000 that no family would have to
pay if we truly lived in a competitive but well-regulated free-market economy.
The $6,000 figure is an average, which means that low-income
families are paying less. But it also means that families (households) making
over $72,000 are
paying more than $6,000 to the corporations.
1. $870 for Direct Subsidies and Grants to Companies
The Cato
Institute estimates that the U.S. federal government spends $100
billion a year on corporate welfare. That's an average of $870 for each one of
America's 115
million families. Cato notes that
this includes "cash payments to farmers and research funds to high-tech
companies, as well as indirect subsidies, such as funding for overseas
promotion of specific U.S. products and industries...It does not include tax preferences or trade
restrictions."
It does include payments to
374 individuals on the plush Upper East Side of New York City, and others who
own farms, including Bruce Springsteen, Bon Jovi, and Ted Turner. Wealthy heir
Mark Rockefeller received $342,000 to
NOT farm, to allow his Idaho land to return to its natural state.
It also includes fossil fuel subsidies, which could be anywhere
from $10 billion
to $41 billion
per year for research and development. Yet this may be
substantially underestimated. The IMF reports
U.S. fossil fuel subsidies of $502 billion, which would
be almost $4,400 per U.S. family by taking into account "the
effects of energy consumption on global warming [and] on public health through
the adverse effects on local pollution." According to Grist, even
this is an underestimate.
2. $696 for Business Incentives at the State, County, and City
Levels
The subsidies mentioned above are federal subsidies. A New
York Times investigation found
that states, counties and cities give up over $80 billion each year to
companies, with beneficiaries coming
from "virtually every corner of the corporate world, encompassing
oil and coal conglomerates, technology and entertainment companies, banks and
big-box retail chains."
$80 billion a year is $696 for every U.S. family. But the
Times notes that "The cost of the awards is certainly far higher."
3. $722 for Interest Rate Subsidies for Banks
According to the Huffington
Post, the "U.S. Government Essentially Gives The Banks 3 Cents
Of Every Tax Dollar."They cite research that
calculates a nearly 1 percent benefit to banks when they borrow, through bonds and customer deposits and other liabilities.
This amounts to a taxpayer subsidy of $83 billion, or about $722 from every
American family.
The wealthiest five banks -- JPMorgan, Bank of America
Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs -- account for
three-quarters of the total subsidy. The Huffington Post article notes that
without the taxpayer subsidy, those banks would not make a profit. In other
words, "the profits they report are essentially transfers from taxpayers
to their shareholders."
4. $350 for Retirement Fund Bank Fees
This was a tough one to calculate. bank fees can "cost a
median-income two-earner family nearly $155,000 and consume nearly one-third of
their investment returns." Fees are well over one percent a year. reports
that over a lifetime,
However, the Economic
Policy Institute notes that the average
middle-quintile retirement account is $34,981. A conservative one percent
annual management fee translates to about $350 per family. This, again, is an
average; many families have no retirement account. But many families pay much
more than 1% in annual fees.
5. $1,268 for Overpriced Medications
According to Dean
Baker, "government granted patent monopolies raise the price of
prescription drugs by close to $270 billion a year compared to the free market
price." This represents an astonishing annual cost of over $2,000 to an
average American family.
OECD
figures on pharmaceutical expenditures reveal that Americans spend
almost twice the OECD average on drugs, an additional $460 per
capita. This translates to
$1,268 per household.
6. $870 for Corporate Tax Subsidies
We've heard a lot about tax
avoidance and tax breaks for the super-rich. With regard to
corporations alone, the Tax
Foundation has concluded that their
"special tax provisions" cost taxpayers over $100 billion per year,
or $870 per family. Corporate benefits include items such as Graduated Corporate
Income, Inventory Property Sales, Research and Experimentation Tax Credit,
Accelerated Depreciation, and Deferred taxes.
Once again, it may be even worse. Citizens
for Tax Justice cite a Government Accountability Office report that
calculated a loss to the Treasury of $181 billion
from corporate tax expenditures. That would be almost $1,600 per family.
7. $1,231 for Revenue Losses from Corporate Tax Havens
U.S.
PIRG recently reported that the average 2012 taxpayer paid an extra
$1,026 in taxes to make up for the revenue lost from offshore tax havens by
corporations and wealthy individuals. With 138
million taxpayers (1.2 per household), that comes to $1,231 per
household.
Much More Than an Insult
Overall, American families are paying an annual $6,000
subsidy to corporations that have doubled
their profits and cut their taxes in half in ten years while cutting
2.9 million jobs in the U.S. and adding
almost as many jobs overseas.
This is more than an insult. It's a
devastating attack on the livelihoods of tens of millions of American families.
And Congress just lets it happen. That's more
than an insult—it's an attack.