The Biggest Welfare Queens of Them All

Republicans love to talk about how Democrats take money from good, hardworking Americans and give it to lazy deadbeats. That story is the meme right-wingers use when they cut welfare, it’s how they frame their war against Obamacare, and it’s how they justify doing awful heartless things like slashing funding for school lunch programs.

But it’s becoming increasingly clear that Republicans don’t actually believe their own talking points. And you don’t need to look any farther than the ongoing joke that is our corporate tax code to see why that’s true.

As Vermont Senator Bernie Sanders pointed out in a recent Senate hearing, many of the richest, most profitable corporations in America don’t actually pay anything in taxes, and in some cases, actually get money back from the IRS. Pretty amazing, right? GE rakes in $34 billion every year, pays nothing in taxes, and ends up getting a rebate from the government.

But GE is just one example of a much bigger problem. And that’s the shifting of the tax burden from rich corporations and billionaires who both consume government services like our courts and banking system, and can afford to pay for it, on to the backs of working Americans and those who can’t afford it.

Back in the 1950s, corporate tax revenues made up as much as one third of all federal tax revenues. But decades of loopholes and carve-outs have taken their toll, and now corporate tax revenues make up just 13.5 percent of total revenue.

This has a very real cost. The National Priorities Project estimates that thanks to corporate tax breaks, the government lost out on $176 billion - I repeat, $176 billion - in potential revenue in 2013. So where is the government getting its money now that deadbeat corporations are shirking their fiscal duty?

Easy: it’s getting it from everyday working Americans. According to Paul Buchheit over at Common Dreams, corporate subsidies cost each American family around $6,000 every single year.

Tax revenues from individuals now make up almost half of all federal revenues, and since a big portion of individual taxes come in the form payroll taxes, this is a burden that falls disproportionately on the working class. In other words, wealth isn’t trickling down, it’s trickling up.

That’s the big irony of Republican policymaking in our post-Reaganomics world. As much as conservatives say they’re against redistributing wealth, they do just that by opposing any and all attempts to close up corporate loopholes and reform the tax code.

You see, taxes aren’t just a way to raise revenue and incentivize certain types of behavior; they’re also a way to transfer wealth, and over the past few decades corporate and billionaire-owned politicians have used our tax code to effectively transfer wealth away from working people to their patron corporations and the rich. This just doesn’t make any sense whatsoever, especially if you don't want deadbeats leeching off the government. Giant corporations like GE and Verizon don’t need government handouts to stay afloat, and the fact that they continue to take handouts just shows that they’re the biggest welfare queens of them all.

As part of his new budget, President Obama has proposed closing many of the worst corporate loopholes.If Republicans actually believe their own talking points about welfare queens and wealth redistribution, they’ll approve this plan, no questions asked.

But that assumes that Republicans actually have an internally consistent belief system aside from doing whatever their corporate and billionaire backers want them to do. Of course, they don’t have such a belief system, so that means real tax reform is still a long ways away.


stecoop01's picture
stecoop01 7 years 51 weeks ago
Quote Thom:, it's trickling up.

Trickling?!? TRICKLING?!?

It's stampeding up, it's skyrocketing up, it's an unrestrianed torrent upwards.

And I want back my share of it.

kipopp's picture
kipopp 7 years 51 weeks ago

Taxes collected by the Federal Gov't via the IRS are not used for Federal spending. I'll say it again - Federal Taxes are not used for Federal spending. The Federal Gov't is monetarily sovereign and has no need to collect taxes. State and Local Governments, on the other hand, are non-monetarily soverereign (just like you and me) and rely on the dollar, which is by law created by the Federal Government, to pay their bills. We need to stop repeating the "Big Lie" the uber rich Oligarchs have brainwashed us to believe.

2950-10K's picture
2950-10K 7 years 51 weeks ago

"2013.....176 billion in lost revenue thanks to corporate tax breaks!!!!"

I still don't know why Progressive Democrats don't push to install a revenue loss clock on the House floor to counter "Tea Party Tom" Reed's debt clock idea....or at least how about a distinct debt clock related to the out of control spending on illegal war and the military industrial spy complex?????

oyvey65 7 years 51 weeks ago

I am not sure, how THEY define a Welfare Queen, I was forced to retire > 30 years ago,

on S.S.D.I. I can barely afford to buy food, let alone Pay MY bills: I earn ~ $50 more than the MONTHLY, Maximum allowed for Medicaid; IT took me more than 4 hours to get SOME HELP from Food Stamps [$16/month].

The C.O.L.A. that the GOP would like to gut, as well --- has NOT even remotely kept up with REALITY.

I worked from a Power Wheelchair, the last 5 years I earned a paycheck. ABLEISM, SUCKS!

I retired because a wealthy Surburban Teenager came up a blind hill, too fast to bother stopping at a Stop Sign; he also did NOT yield right of way; however the young, male SPD Officr who arrived at the scene, after-the-fact; chose NOT to cite the

male teenager, who essentially ended MY paid career [I suffered both head and neck injuries, from THAT 'accident'; and was unable to return to my place of employment within the 3 month [unpaid] time-limit, I had been given. The only reason, I am NOT currently homeless is that I paid off my mortgage > 10 years ago; and qualified for a reduction in my Real Estate Tax Bill; and a Special Rate on my Utilities --- I use Heating Oil, even here in Seattle, [temperate climate, or not]; its still too high to fully heat my home; and I do run out of oil, periodically.

I did NOT choose to retire, not everyone does. My outgo, exceeds my income, consistantly. I use my local Foodbanks, and attend a variety of Community Dinners in my neighborhood; because of Food Instability. ?Where can I cut --- there IS nothing

left to cut back on.

Once upon a time I was Upper Middle Class; now I am barely Middle Lower Class. I do

not understand, where else I can cut.

My home has been adapted, over the years, to my progressively more difficult challenges [I DO NOT PLAN ON MOVING]. My neighborhood, is > 85% walkable; I

waited more than 2 decades, for curb ramps to be built, on my block. With tree roots,

breaking up the sidewalks; it could be better. But I live in one of the safer Urban Ghettoes of Seattle; and after > 40 years in my home --- there is no where else I'd

choose to live.

Johnnie Dorman's picture
Johnnie Dorman 7 years 51 weeks ago

I agree with Bill Marher, who recently said, "trickle down economics is like giving a weenie to one of three dogs and expecting the dog with the weenie to share it with the other two."

Thanks Reagan, I knew you were in the pockets of the rich long before you died.

All of this really makes me angry as hell. Why can the people do anything about dogs like Scott Walker that are so obviously and undeniably working for dogs like the Koch brothers that have all the weenies, and he's laughing at the middle class all the way to the bank. Brainwashing talking points seem to trump any education about this stuff, like Thom Hartmann provides here, and it's because so many U.S. citizens seem to suffer from ADD. They have been dumbed down to the extent that they are litterally voting for their own jailers. Something like Stockholme Syndrome has totally taken over their tiny missled brains. They hate labor unions in the face of the fact that unions protect them from being taken advantage of, just because Fox News tells them to. This is just too remenescent of Germany 1939, when the good Germans were so propagandized that they almost completely destroyed themselves.

PaulHosse's picture
PaulHosse 7 years 51 weeks ago

I find it very interesting that Republicans and other conservatives talk about reducing the size of government and getting government out of lives, and yet the corporations thrive on public money and then there's the revolving door between the two. In some cases, it's hard to tell where government leaves off and corporations begin. I think it's time for them to live up to their own rhetoric and get end not only corporate welfare but the revolving door between the two as well.

Elioflight's picture
Elioflight 7 years 51 weeks ago

Oyvey 65: Your story is tragic, maddening, sad,... I know so many retired people who are struggling, yet cling to their boxed-in conservative mindset and to the faux values of the Rethuglican party and fall for their lies--over and over. My catholic mother-in-law sits at my kitchen table and "bitches" about how tough she has it, but every election day, she steps into the voting booth and votes against her best interests because of abortion. I try to tell her that the Rethugs are only against abortion for the poor. The wealthy need it still for their wives and misstresses and daughters and the unworthy women of their trust-fund sons. But I cannot reason with her.

Perhaps you could advocate to the retired, who, I imagine, think President Obama created this situtation and set them straight about who really created these policies. Please tell them that Jeb Bush or whatever democracy-stomper they nominate will use them to the enrich those who already enjoy a splendid life on our/their backs.

I am the payee for my mentally disabled aunt. She is 73 years old and is in assisted living. She goes to dayhab five days a week and volunteers for organizations around the city (out-of-my-pocket, I pay $120 in fees yearly for her there). After I pay for her apartment and the Area Agency on Aging fee, which I think is really paying for insurance she should be receiving for free because of her low income, she has $50. Then I must pay her basic cable fee, which is about $25--Time-Warner does not give senior discounts--and a new fee of $4.20 of some meds I cannot get covered--she will have $20. She does not understand why she has so little to spend. But at least she has something now. The county assisted living facility she was in kept ALL of her extra money and went through her and other resident's rooms to resell their possessions in a store. She had NOTHING when I moved her out. I've had to pay to furnish her apartment; I purchase all of her OTC meds and pay for her haircut/lunch outings. I also am stretched. I receive a stipend once a year and must get by on that.

America has become a heartless country. Nothing like what my ancestors, who came over in the 1600s, would have ever dreamed.

Elioflight's picture
Elioflight 7 years 51 weeks ago

Where is Kend? He says corporations and the wealthy do pay their share.

chuckle8's picture
chuckle8 7 years 51 weeks ago

kipopp -- My first response would be what are you talking about? However, probably everyone says the same thing to me when I say "increase the deficit, decrease the debt". I try to explain, and I get no responses.

So please explain what you are talking about. Before you do, remember the concept of money was created to pay for the commons (AKA taxes). This is not a theory. It is what history reveals from 4000 years ago. If we have no taxes, we need no money.

chuckle8's picture
chuckle8 7 years 51 weeks ago

2950-10K -- revenue losses and debt clocks do not measure the main function of government to invest in our future.

Your suggested measures would make the raygun tax cuts look great. When he cut the top tax rate, the top earners paid 3 times as much in tax. The result was the crashing of the economy.

David32's picture
David32 7 years 51 weeks ago

Thom, CORPORATIONS ARE TAX COLLECTORS, NOT TAXPAYERS. Why is this so difficult to understand? How can you claim that corporations are not people then turn around and tax them as if they are? Corporations/businesses get their money from their customers, ie, you and me, with a few exceptions and nowhere else. You know this, I've heard you say it, so why do you and others persist in this "fair share" argument when it is you and I that will be paying the corporations "fair share"? I just don't get the contradiction.

kipopp's picture
kipopp 7 years 51 weeks ago

chucke8 - Not sure what you don't understand. Federal taxes are not used for anything. It's dollars accounted for by the IRS never to be used again. There are plenty of taxes/fees for us to pay to non-monetarily sovereign State and Local governments.

chuckle8's picture
chuckle8 7 years 51 weeks ago

David32 -- 25% of the biggest corps in US get checks from the govt. How can you not understand that in no way are are corporations natural persons?

chuckle8's picture
chuckle8 7 years 51 weeks ago

kipopp -- Are you saying that when I send my tax payment it is not counted as revenue? Are you saying when the US Govt sends a check to Lockheed it is not counted as an expenditure? Are you saying the difference between these two are not recorded as a deficit or surplus?

kipopp's picture
kipopp 7 years 51 weeks ago

chuckle8 - There is no “transfer of tax revenue,” and never has been. Tax revenue ceases to exist once it is received by the Treasury.

chuckle8's picture
chuckle8 7 years 51 weeks ago

kipopp -- I never mentioned the word transfer why did you?

kipopp's picture
kipopp 7 years 51 weeks ago

chuckle8 - just connecting your accounting dots.

chuckle8's picture
chuckle8 7 years 50 weeks ago

Kipopp -- Transfer is not the only way to connect the dots. You seem to imply that it is the only way and because the federal government does not connect the dots that way we do not have to pay taxes.

kipopp's picture
kipopp 7 years 50 weeks ago

chuckle8 - I'm giving you the benefit of the doubt given your accounting terms (i.e., revenue is actually recorded as a "credit' and an expenditure is recorded as a "debit"). None of those terms means anything because it has no real effect on how The Federal Gov't creates dollars. If taxes fell to $0 the Federal Gov't would still be able to pay its bills because the law says so and you and I and every person in our country believes in the dollar.

chuckle8's picture
chuckle8 7 years 50 weeks ago

kipopp -- The debt ceiling battles and all the damage they caused does seem to fit with what you are saying.

kipopp's picture
kipopp 7 years 50 weeks ago

chuckle8: Man, you are all over the place. What does an arcane, useless, waste of time law have to do with the Federal Gov'ts ability to create new dollars?

chuckle8's picture
chuckle8 7 years 50 weeks ago

kipopp -- That arcane, useless, waste of time law is why we have to pay taxes.

The only reason money came into existence 4000 years ago (which includes creating new dollars) is to pay for the commons. I think paying for the commons could be called taxes. I think creating new dollars without restraining it by the revenue taken in has always led to failed economies. One of those failed economies brought us Hitler.

kipopp's picture
kipopp 7 years 50 weeks ago

chuckle8 - Money is not physical. It all started with the end of the gold standard in 1971. At that moment, money not only became not physical in itself, but had no physical surrogate. When I say money is not physical, I mean you can’t see it, touch it, send it, hold it or store it. Money is nothing more than an accounting notation. That dollar bill you have in your wallet is not money. It is a receipt from the federal government, saying the government owes the holder a dollar. In that sense it is similar to a check you might write, which tells your bank to credit the recipient’s account. Think of that dollar as like the title to your house. The title is not the house. The title merely states that you own the house. A dollar bill is just a “title” to an invisible, non-physical dollar. If you believe in Modern Monetary Theory (MMT) you would be correct regarding taxes. They believe you tax at the Federal level in order to control aggregate demand. As I said before we pay enough in taxes to State and Local Gov'ts which helps with agregate demand. If what you are worried about is inflation, then look to oil prices. Inflation in the US has been controlled for years via interest rates by The Fed. I'll also repeat what I said before, Federal Taxes pay for nothing. When you pay taxes, your bank account (Call it “Point A”) is debited, and the Treasury’s account (Call it “Point B”) is credited. There never is a time when money moves between Point A and Point B. That tax check you mail is just a set of instructions telling the federal government to debit your checking account and to credit it own account — which it just as well could do without your instructions. Similarly, when the federal government spends, it does not send money anywhere. It merely instructs banks to credit certain checking accounts, while it debits its own accounts. Simplified, the federal deficit is the difference between the credits to the “Taxes” account and the debits to the “Spending” account. And none of this adds to the so called "Federal Debt".

chuckle8's picture
chuckle8 7 years 50 weeks ago

kipopp -- Interestingly, I thought I was describing money exactly the way you are describing it.

What do you mean by the so called "Federal Debt"? Do you mean the value of the debt clock? I thought that debt clock was the difference between the credits to the "Taxes" account and the debits to "Spending Account".

I thought the charter of the Fed was to do the delicate balance between inflation and unemployment (AKA negative effect on the aggregate demand).

With regard to inflation, I live on a fixed income, and even I think inflation is too low. We need 4% not 2% to keep this economy going.

Any unemployment rate above 3.8%, in my opinion (based on the US history of the economy) means the aggregate demand is too low. Since our unemployment is around 6%, I think one can conclude the states cannot do enough.

kipopp's picture
kipopp 7 years 50 weeks ago

The federal debt is just a bookkeeping number based on an obsolete law requiring the Treasury to issue T-securities in the amount of federal deficits. (Look up the Second Liberty Bond Act) The “debt” is functionally just the total of outstanding T-securities, not the total of deficits. In a Monetarily Sovereign nation, there can be deficits without debt, and there can be debt without deficits.

Let me explain.

When you and I spend more than we earn, we say we are running a personal “deficit,” and the total of these deficits is our personal debt. For us, debt and deficit are fundamentally connected. To have a debt, we must run a deficit. This is how personal finances work.

Finances for the U.S. government does not work this way. The federal debt and federal deficit are not fundamentally connected. The U.S. government can have deficits without having any debt, and it can have debt, without running deficits. The same words — “debt” and “deficit” — have different implications, when applied to federal finances and personal finances. Here is the difference: The government runs a “deficit” when its spending exceeds its tax income. The federal government runs a “debt” when it sells Treasury securities. The two actions are connected, not by fundamentals, but only by a law requiring their connection. (Again, look up the Second Liberty Bond Act) This law requires the federal government to issue T-securities in the same amount as the deficit. These T-securities do not pay for a deficit, do not offset a deficit, do not fund a deficit. They merely are issued in the same amount as the deficit. If the federal government wanted to it could double its spending, eliminate taxes, and create a monster deficit, without selling a single T-security. On the other hand the federal government could sell trillions in T-securities, while at the same time not have a deficit.

Let me further expand on the so called “debt” and T-securities and how they actually work.

If you are a “lender” (i.e., buyer of T-securities) to the federal government, you have taken dollars from your bank checking account and deposited them into your T-security account at the Federal Reserve Bank. A T-security account essentially is a bank savings account. Your deposit has increased the so-called “debt,” but has had no effect on the deficit. You simply have made a bank deposit, but rather than calling it a “deposit,” the media, politicians and mainstream economists misleadingly call it “debt.” To “pay off” the federal debt, the Federal Reserve Bank does exactly the same as any bank does when “paying off” your savings deposit: It transfers dollars from your T-security savings account to your personal checking account. Period. Done. The entire “debt” could be paid off in an instant by merely transferring al the dollars from the savings account back to the checking accounts of the “lenders”. All the BS you read and hear about the federal deficit and the federal debt merely serves to confuse the public and to blur the line between personal finances and federal finances.

kathleenvosswoolrich's picture
kathleenvosswoolrich 7 years 50 weeks ago

On the cardiac observation floor.

I had two seizures today and I have never had a seizure in my life

I dont have regular health insurance because medicaid did not expand in the state of florida so even if they find out why I have no way to get a consult outside of the hospital. Untreated heart failure and lupus wreaked havoc all over my body and I am now having seizures. I had one the middle of an actual examination

Think it did not matter that the republican house got relelected and is denying almost a million people in Florida healthcare? It mattered to me. It mattered to my kids

I matter


chuckle8's picture
chuckle8 7 years 49 weeks ago

Kippopp -- I'll bet Kathy V does not that what we are discussing is the root cause of her problem. That is, the economic policies of ronnie boy.

Back to the details. Just to understand what you are saying I have a new way to reword what I have asked previously. Is the debt clock just a measure of those T-securities?

I do not disagree that the federal debt is based on a law. What I want to know is why you call it an obsolete law?

Are you aware of the passage out of Adam Smith's "Wealth of Nations" that Thom uses from time to time? He talks about a stick of wood has no value until it is made into an axe handle. When you speak of fundamentals, is that the type of fundamental you are referring to?

kipopp's picture
kipopp 7 years 49 weeks ago

Yep, debt clock is just the t-securities which, as I said before, can be paid back by sending the amount in the purchaser's Fed t-securities account back to the purchaser's checking account. It's an obsolete law because there is no need to create t-securities to cover the so called "deficit". The "deficit" is an obsolete term also and, as I said above, doesn't equate to a personal deficit (not earning enough income to cover our bills).

The "fundamental" you describe above relates to micro-economics. Our conversation is about the macro-economics. I said that "The federal debt and federal deficit are not fundamentally connected." In other words, they are not related to or effect one another.

chuckle8's picture
chuckle8 7 years 49 weeks ago

kipopp -- Your lack of being brainwashed makes me wonder if you have ever had an economics course.

The Adam Smith example was to describe what the wealth of a nation is made of. That does not sound like micro-economics to me.

Once again, the MMT people have pointed out that the purpose of money is to create a means by which to pay for the commons (AKA taxes). Under that understanding the personal deficit sounds like the obsolete concept. That is, if we do not collect taxes we do not need money; and, consequently, we do not need a checking account.

FDR and LBJ built the greatest economy the world has ever known They used the bookeeping tricks of deficit, debt and taxes to enable the building of that economy.

kipopp's picture
kipopp 7 years 49 weeks ago

wood and axe handles = microeconomics.

monetary policy = macroeconomics.

Yes, MMTers are all about aggregate demand. As I mentioned before there are plenty of non-monetarily sovereign entities (i.e., State and Local Gov'ts) that need our tax dollars because their finances are similar to personal finances. We still were not completely off of the gold standard in the 30's (FDR began the process) and 60's so the laws requiring we borrow dollars (debt) to offset the difference between revenue and spending (deficit) were still relevant. Those laws became obsolete when Nixin took us completely off the gold standard.

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