When House Speaker Dennis Hastert (R-IL) stood before his colleagues and waved dollar bills above his head to signify the money he wants to "return to the people", he conveniently neglected to mention the tens of billions of dollars that he will taking from the federal revenue stream and placing in the pockets of the nation's largest and most profitable industries. In fact, you can kiss nearly $90 billion goodbye due to just nine tax breaks that Congress was specifically purchased by these industries in order to pass.
The AMT (Alternate Minimum Tax) was passed in 1986 when it was discovered by American voters that literally hundreds of America's most profitable corporations had paid absolutely no taxes in the preceding years due to lovingly enacted loopholes passed by Congress. This tax only required that the corporations compute both their minimum tax and the regular tax responsibilities for that year and to pay the AMT is it was larger than the regular tax obligation.
Naturally, Corporate America immediately created the AMT Coalition to fight the law and to, if possible, repeal it. So far, they have failed to have it repealed but have greatly succeeded in diluting its power. In 1997, they were able to enact legislation greatly increasing their deductions for equipment purchased and used in overseas divisions. The 1999 version of the tax bill now also completely wipes out a corporation's federal tax debt if it can show a large enough foreign tax credit to offset any owed here The cost to you and I for this gift to Corporate America? A cumulative $26 billion over the next decade.
Multi-national corporations have their share of the taxpayer's candy coming to them, as well. The new code will enable any multi-national corporation to treat all debt, both foreign and domestic, as domestic and, in some part, deductible. Next, where the current rule is that a corporation must be at least 50% owned by a U.S. corporation in order for it to treat that debt as domestic, the new rules lower that bar to only requiring a 20% ownership by U.S. business. This will enable large, multi-national corporations to enter into "partnerships" and "joint ventures" with foreign entities and, thus, see a tremendous drop in their tax debt here. In fact, this provision is so important to Corporate America that one of their lobbyists calls it "the vein of gold" in this bill.
Ignoring the vastly over blown claims of its sponsors, this act will not, as they claim, keep corporate operations in American but will, instead, make it far more profitable to move those jobs and plants overseas in order to take advantage of this provision.
The cost to you and I for this gift to Corporate America? $24 billion between 2002 and 2010.
Next at the feast we find the R&D Credit, a tax credit of 20% meant to encourage research and development in the high-tech and pharmaceutical industries, in particular. Passed in 1981, this credit was only taken once research spending reached a certain base cost.
The R&D Credit Coalition, however, wanted and got a vastly more beneficial credit in this bill. Instead of this credit being re-examined for its effectiveness every year, it will now be in place for a full five years. Should the bill be vetoed by Clinton, as is expected, the coalition is pushing for a permanent credit in the next version of the bill.
Many critics of this credit complain that this is clearly a simple case of Corporate Welfare since the corporations must invest in the research, in any event, if it is to stay competitive and that this credit encourages absolutely no additional research. In fact, even a conservative and capitalist magazine such as the Investor's Business Daily, noted that this credit "is clearly wrong. Congress should cut corporate taxes across the board, not favor special interests". (We'll leave the irony of that last part of the statement speak for itself.)
The cost to you and I for this gift to Corporate America? $13.1 billion if the current five year extension is granted, an unknown number of hundreds of billions if it is extended permanently.
The oil industry, already the beneficiary of literally thousands of loopholes and tax breaks, are expressing their unrivaled greed in demanding a new definition of an old tax break. Where once they could deduct 35% of the taxes paid to foreign governments from their federal responsibility, they now want to extend that to the income from oil extraction. Normally, a government asks for royalties for any oil extracted from their lands. This new provision will allow oil corporations to ask those governments to change from royalty payments to a tax of exactly the same amount. That "tax" would then be deducted from the corporation's U.S. tax debt.
The cost to you and I for this gift to Corporate America? $1.6 billion.
Even your neighborhood restaurants are pulling their chairs up to the trough and gaining their "share" of the feast. They are clamoring for the percentage of a business meal that is tax deductible to be increased from the current 50% up to 60% over the next ten years. Their ultimate goal, according to the legislative representative for the National Restaurant Association, Kathleen O'Leary, is a 100% tax deduction for all business meals.
Now, understand, even the Wall Street Journal's columnist Albert Hunt states that, "Almost any independent study - including the authoritative Congressional Research Service - concludes these tax subsidies have virtually no effect except to lose federal revenues".
The cost to you and I for this gift to Corporate America? $4 billion over the next ten years.
Even those happy and carefree purveyors of death, the "defense" industry, is clamoring for better tax treatment. Currently, by setting up sales corporations in foreign countries, certain industries (except the defense industry) can avoid paying about 15% of the taxes due on those profits. Not content with their current obscene profits from the deaths of human beings around the world, the industry wants to share in that 15% break due to their foreign branches.
The cost to you and I for this gift to Corporate America? $1.1 billion over eight years.
Finally, those corporations that have for years polluted the air and water and soil in America have found a way out from under having to pay for the clean up of their messes both past and future. Instead of continuing the tax paid that went into the "Hazardous Substance Superfund Trust Fund" which is the source of money for all Superfund clean ups, the new bill simply combines that fund into the "Leaking Underground Storage Tanks Trust Fund" and renaming them the "Environmental Trust Fund" (oh, how warm and fuzzy does that sound?). Of course, by combining these two separate trusts and deleting the tax due to the Superfund trust, all that has happened is that the EVT will die a slow, unfunded and unheralded death in the next few decades.
The cost to you and I for this gift to Corporate America? $2 billion a year.
Now let's look at exactly what it cost these industries to purchase the government necessary to get these huge pay backs. The cost to virtually eliminate the Alternate Minimum Tax cost the various companies and trade organizations approximately $22.2 million.
The cost to shelter even more of a multi-national's income from U.S. taxes cost the National Foreign Trade Council and related groups about $23.1 million in bribes to Congressmen but disguised as campaign soft money contributions.
The cost to the R&D Credit Coalition to broaden the eligibility for and the deductions for the R&D Credit was about $25.6 million.
The oil industry spent about $22 million in order to gain their new tax breaks.
The restaurant industry spent about $4.3 million so far to increase the amount deductible on a business meal.
The "defense" industry spent $9.4 million to buy their gifts.
Finally, the oil, chemical and insurance industries spent about $24.8 million to destroy the Superfund and to remove their responsibility to clean up their own messes.
Now, let's see what every dollar spent in the purchase of Congress has gained these industries.
The total spent was $131.4 million. These dollars gained them an additional $89.8 billion in tax breaks. That means for every $1 spent, the industries gained $684 in your tax money as profits. Not too shabby, wouldn't you say? Remember as well, gentle readers, that this is not the grand total of what Corporate Welfare costs you every single year, year in and year out! These numbers only reflect what they have been able to add to their theft out of your pockets this year ALONE. In total, the amount that you give to Corporate America as welfare is quickly nearing ONE TRILLION DOLLARS every year!!!!! And you thought the $78 billion a year for America's poorest women and children and the destitute elderly was so much that we had to find some way to cause them even more pain by "Reforming" social welfare?!? (1, see note)
Lord above, what a sick and perverted joke!
Return To Front Page
Visit Our Unique Shops At:
The Progressive Mind
Impeach The Moron
Rosetta Stone - Your Name In Egyptian Hieroglyphs
Signs of the Zodiac Gifts