so many have heard the term "Corporate Welfare" .... so you need to understand some basic mathematics
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1. first let's understand some basic mathematics. If a company pays a person $1 ... the person only sees (at the LOWEST tax bracket) .76 ... however, the one thing you may not know ... is that it costs the company $1.24 to pay the person ... at the lowest tax rate ... $.76 - at the secondary level - this equates to (at a federal level) to $.63 ... which means the company is paying - through unemployment insurance, workmans compensation insurance ...
So $1.24=$.76 or $.63
2. SSN taxes upon the individual are paid by the individual ... however - the company you work for pays that same amount + 4% ... not to mention medacaid, SSI
3. your company pays for your workman's compensation insurance
4. your company pays minimally 60% of your health-care insurance
NOTICE: taxes on an address are MUCH MORE as a business than not
SO ... you MORONS, yes I said morons ... that think the businesses get off easy or use the term "CORPORATE WELFARE" ... get some education ... you might find that the gov is and has been driving the business OUT OF the US
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| the buzz term "corporate welfare" |
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Godless
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Sep 21 @ 12:19AM
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When I speak of corporate welfare, I have in my mind the big agricultural companies for the most part. Who, from what I know, pay mostly transient laborers, don't pay taxes on the labor, don't provide insurance to those workers, get steep discounts on water, pay far less in land tax than your average homeowner, get money from uncle sam for every piece of produce produced, uncle sam buys what's left over if they produce too much, AND uncle sam sometimes pays them to underproduce.
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koyaanisqatsi
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Sep 21 @ 1:40AM
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Welfare is when the government gives fungible goods (like money, food stamps, or subsidized services) to a recipient who is in need. For example, food stamps are a form of welfare to low income individuals. They have trouble paying for food, so the government gives them welfare to help them eat.
I fail to see how you think doing "math" with personal finance and payroll has anything to do whatsoever with corporate welfare.
What in the world does unemployment insurance, payroll, medicaid, personal finance, etc have to do with corporate welfare?
Now, let me state what *I* think corporate welfare is. It has nothing to with the things you mention: tax brackets, "SSN taxes", health-care insurance, etc. It has to do with the government giving money to companies in need, just like how personal welfare is when the government gives money to individuals in need. Here's a nice example:
In 1989, The state of New York promised Chase Manhattan bank:
* 52 million dollars in sales tax breaks.
* 35 million dollars in energy subsidies (NY pays Chase's energy bill)
* 108 million dollars in property tax breaks
* 17 million dollars in "relocation fees" (paying for Chase to open store fronts in the NYC outer boroughs).
What did New York get for its 212 million dollars?
* In 1995, Chase Manhattan cut 5,720 New York City jobs.
* In 1998, Chase Manhattan cut 2,200 New York City jobs.
* In 1999, Chase Manhattan announced that 3,500 NYC jobs (10% of its NYC workforce) would be relocated to other states.
So the state of New York gave 212 million dollars to a company "in need". In return for all this money, NYC lost 62,900 jobs.
I happen to work on Wall street. If you have a mortgage on your home, it's very possible that your mortgage was rated by software I wrote when your mortgage was securitized into an RMBS.
Very often I go drinking with friends or Salsa dancing on Pier 17, not too far from Wall street. If you look out across the water, you can see the new Chase complex, all nice and shiny. Many of the 62,900 jobs were moved there. The complex was built, in part, with the 212 million dollars that New York gave to Chase Manhattan.
In the end, words are just labels. But if we define "welfare" as I did in the first paragraph, what exactly would you call the 212 million dollars? If it's not corporate welfare, as I defined the word "welfare", what exactly is it?
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Hobbit101
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Sep 21 @ 1:55AM
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corporate buisnesses pass there cost on to consumers too and there employees are there consumers often enough too. along with the fact that corporations across america have yeilded for 5 years running the highest profit margins in history of the stock markets. i see your case as unvalidated by the fact those cost are passed on in price hikkes of your products.just so the CEOs can have gold plated toilets just like donald trump. a status quo thats wiping out the middle class and blue collar workers acorss our nation not to mention an all time low in living wages and high inflation rates housing thats literally went through the roof via the facts of chase manhattan 1 million homes forecloed on this year alone in america. sorry dude i dont by the corporate expendature or cost math its corrupted.
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hereshannon
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Sep 21 @ 2:02AM
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My definition of corporate welfare is HALLIBURTON!! Past CEO Dick Chaney, company being given no bid contracts to service the Iraq war. Providing soda pop to American soldiers at the reasonable rate of 150 dollars a case!! Perhaps ypu are the "moron" who needs some education.
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steveemac
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Sep 21 @ 3:16AM
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4. your company pays minimally 60% of your health-care insurance
What alternate universe do you live in? Most companies pay 50% of a single person's premium, unless said person is a union member, or the company is compelled to by the market-i.e, paying a higher premium is necessary to attract enough qualified employees. Furthermore, the amount of the premiums paid does not necessarily reflect how much the employee has to pay for deductibles or copays, or how comprehensive the coverage is.
SO ... you MORONS, yes I said morons
What is moronic is the fact that you probably heard this on the radio today from Belling or Sykes.
SSN taxes Taxes are paid on Nuclear (not "nucular") Submarines?
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garrays
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Sep 21 @ 6:29AM
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The biggest drain on our country is welfare in all it varied and twisted forms. This is why the fair tax act is so important for this country. Most folks dont remember or have the history taught to them about the original Income tax. It was a flat tax as well when first put on the backs of the country. A new class of parisite was created...the K street lobbiest! This form of foul creature makes it living tweaking and screwing with the tax code until it now has more pages than the Bible!!
Congress is spewing lies and twisting the truth about the Fair Tax Act including BS about it being a scientictology creation, which is isnt. This is done to polute the minds of the mob as most of them dont have the mind to do research on the truth as long as they can get their SHARE or think BIG BUISNESS is getting it put to them. Every time a tax increase is put on business or a group it results in an increase tax on everyone down the food chain, especially the poor. As long as the current tax structure exist Congress and government have massive power to control and manipulate the country. The Fair Tax Act gives back to the people a great deal of that power that was originally intended for them by the founding fathers.
Congress will do everything in their power to prevent this. Read up on the Fair Tax Act at Fairtax.org or buy a copy of the book and read up on it, take time out from that wrestling event or Ophra and actually learn something....might actually save your home or retirement and your mind.
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Kat_luvr
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Sep 21 @ 8:33AM
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Put a Folk in her... I think SHE ( THE US) is Done..........
Lets Just say everyone made some really valued points. There was some truth in all these opinions.
Time to a deserted island and start anew. 
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lefthandedluckie
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Sep 21 @ 9:04AM
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you need to go back to school and learn how to make a topic sentence corresponde with your paragraph body. Did you lose track with what you were trying to say?
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Xanadath
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Sep 21 @ 9:12AM
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Am I to understand that corporations need help from the government?
Corporation:
A corporation is a legal entity (technically, a juristic person) which has a separate legal personality from its members.
Welfare:
Welfare is financial assistance paid by taxpayers to people who are unable to support themselves.
(also:)
"Corporate welfare," usually in the form of favorable tax policy, is sometimes used in order to provide capital to an industry that the government perceives needs financial assistance in order to survive or to expand, or which the government wishes to support for political or economic purposes.
Corporate Welfare:
Corporate welfare is a pejorative describing a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations.
Capitalism:
Capitalism generally refers to an economic system in which the means of production are all or mostly privately owned and operated for profit, and in which investments, distribution, income, production and pricing of goods and services are determined through the operation of a market economy.
(all data obtained from Wikipedia)
Assuming all this is correct, then I might make the statement that "Corporate Welfare" is aid from taxpayers to corporate entities to ensure their survival.
If the argument is to go along the lines of supporting those that rely on said corporations for their jobs, etc... then perhaps the same can be made for the grocers and landlords of private citizens on welfare?
Doesn't all taxpayer aid become a "trickle down economy" of sorts, much like the argument that tax cuts stimulate the economy?
Let's examine the dollar equation. Assuming Federal Income tax of say 25%, perhaps a state tax of 5% and sales tax of 5% (assuming you buy anything), we're looking at $1.00 earned becoming $.65 net... before other taxes and fees take effect. Even at $.70, the property tax can be harsh for homeowners. Own a car? Car Insurance is mandatory in most states. Homeowners insurance? Gas tax? Other little fees?
How much is left after all that?
While I see a need for temporary help for any private citizen in times of need, I also see as much for corporate entities, assuming it is in as much dire need as it's citizen counterpart and running a presumably tight ship to make ends meet. Especially if it provides vital services like transportation and such.
I believe the disdain for corporate welfare in conversation comes from the contrast of citizens not making ends meet even with assistance to the corporations gaining billions of dollars in aid. While the bonus programs of some excesses in various corporate structures may not be linked to the same entities gaining aid, the incredible contrast does boggle the mind of the average blue collar wage earner.
The average citizen can be assured that they will not gain relative help should they be in dire need. The social programs are not enough to survive on, assuming your standard of living was above poverty level. Be prepared to sell your car, at the very least, if you're on some form of aid for very long.
All of which from the taxes of the producers, earners and taxpayers. Private and corporate.
When a private citizen isn't getting on in his/her job, they must adjust spending or increase their earning... usually finding another job.
Doesn't corporate welfare just prolong the inevitable demise of a corporation that should perhaps dissolve and be replaced by a more efficient entity?
Isn't that the spirit of capitalism I hear about so much from conservatives?
Personally, I'm against taxes and insurance anyway, being more or less Libertarian.
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iam7545
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Sep 21 @ 9:14AM
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while I agree with koy there is probably more to the story. Corporate welfare is usually the result of corporate blackmail.
Football team threatens to move to another city -
city builds a new stadium that increases revenue to the team
city uses "creative" accounting to prove that the stadium will bring in millions in "tax" revenue from sales tax and entertainment tax
The same thing happens with large corporations - they want to build a new factory - local governments try to lure them with sweetheart deals.
I think that the separation of government and business is MORE important than the separation if Church and State. After all each time a deal is made many politicians have their pockets lined to pass the legislation. So it is a win win lose - business wins - politician wins - taxpayers loses.
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kjac
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Sep 21 @ 9:44AM
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Ok, this will be my last blog comment for the weekend, because the universe is obviously spinning out of control for me to agree with iam.  I have seen the corporate blackmail he is speaking about when his state stole my Browns and turned them into the Ravens.  Then the NFL holds Cleveland hostage telling them they couldn't have another team until a stadium deal was reached.
The Modell and Lerner families made out like bandits at the expense of the taxpayers of both cities. Any MORON, yes I said MORON, can see that is a classic example of corporate welfare.
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sparechange64
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Sep 21 @ 11:18PM
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I always completely love when lefties try to make their case ....
YOU are the ones who need schooling here ... you THINK that corporate welfare ... NOT WELFARE ... CORPORATE welfare ... is the situation in where you describe the government's involvements such as of money grants, tax breaks, or other special favorable treatment on corporations ... when in FACT, my points POINT out the fact that it is a myth created by you
WHILE there is truth to the fact that companies often recieve some tax breaks, it NORMALLY is caused by the locality agreeing to move there, thus creating jobs, etc ... in which people who live there dump their earnings back into the economy anyways ...
and of course I have the total lefty HS blaming halliburton ... not speaking intelligently on the subject and knowing that there are 3 ... that's THREE companies in the WORLD that can do what halliburton CAN do rebuilding cities and infrastruture ... and that bush gave the US contracts to a company run by democrats (the CEO is the national chairman of the LA democrat party)
... or that cheney hasn't been involved with halliburton for 30 years ... yeah ... real intelligent comment
and of course I do not know what planet the lefty stevie is living on but you should get some education and see how much your company pays ... normally hundreds a month compared to your less than a hundred ... and who the heck are belling or sykes ... your intelligence astounds me lefty
LHD - yeah ... that was an intelligent comment ... guess we could already tell that by your name though
X ... the fed is 28% ... for MC ... stae is about 10% sales taxes are normally around 6% ... but this blog also counts all the "fees" corporations have to pay to have you work there ...
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LongRanger278
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Sep 22 @ 3:20AM
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What 99% of the company's do in this country is pick-up the expense of running it. The hidden taxes and CODB that are targeted at business owners. Obviously most of you don't own one. The single largest expense to employers are employee's. That's why the job's are moving out of the country.
People in this country demand of the company's a living. As if it's up to the company to provide it's employee's with a comfortable lifestlye. What are the 2 largest expenses on a P & L. Payroll and purchases of goods to produce the product in which escalates mostly from payroll demands.
The State of Michigan is a prime example folks. How long can you afford to pay a janitor $60,000.00 a year?. How long can you afford to pay a part assembler
$70,000.00 + benefits until your forced to give company's incentives to stay?
The cost of U.A.W worker per employee to General Motors in 2005, 110,000.00 a year for doing what?
I opened a buisness to make money, I pay my employee's a fair wage. What more do I owe them?. It cost me damn near a 1/2 million dollars a year just to process payroll and employee benefits.
some of you need to get a clue.....................................
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Xanadath
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Sep 22 @ 6:57AM
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Sparechange,
I sit corrected (I never stand when typing). I was estimating without looking up the exact numbers, but I think I was close enough for making my point. For my personal taxes, I'm in the 25% tax bracket and pay no state or sales tax in New Hampshire. I considered that the numbers I gave ran close to the average U.S. citizen.
from wikipedia:
United States federal budget, 2007
Estimated receipts for fiscal year 2007 are $2.4 trillion. Percentages in parentheses indicate percentage change compared to 2006. This expected income is broken down by the following sources:
$1.1 trillion (+12.1%) - Individual income tax
$884.1 billion (+7.4%) - Social Security and other payroll taxes
$260.6 billion (+15.5%) - Corporate income tax
$74.6 billion (+1.3%) - Excise taxes
$28.1 billion (+0.7%) - Customs duties
$23.7 billion (+9.2%) - Estate and gift taxes
$48.4 billion (+14.0%) - Other
(from wikipedia under "United States federal budget":)
Under Clinton in 1996 the budget was ~1.6 trillion up to ~1.8 trillion by 2000. Under Bush it has increased to ~2.8 trillion for 2007.
What 99% of the company's do in this country is pick-up the expense of running it.
Based on the figures, assuming they are somewhat accurate, I would think it's pretty heavy all around.
We vote (and pay their salary and benefits) for the people who set the margin of taxing and spending in this country. Does anyone else besides me think we should get a value of fair trade for their work and maybe also get something close to a result we desire? I often wonder how many people are satisfied with the overall result of our current balance.
Unfortunately, in order to understand the complexities of U.S. economics, it takes a bit more than reading a few newspapers.
If it's viable, I'd be happy with a flat tax or consumption tax to replace the entire IRS and U.S. tax code. Not that the personal income tax is unconstitutional or anything like that...
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koyaanisqatsi
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Sep 22 @ 9:29AM
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I always completely love when lefties try to make their case ....
YOU are the ones who need schooling here ...
I wouldn't call Iam a lefty.
And I am in school. I work in the finance community by day and take further classes in mathematical finance by night. So indeed, I am in school.
And corporate welfare is not a left/right issue. The libertarians are hopping mad about corporate welfare too. And the few Republicans left in Congress who still care about fiscal responsibility are mad about it as well.
you THINK that corporate welfare ... NOT WELFARE ... CORPORATE welfare ... is the situation in where you describe the government's involvements such as of money grants, tax breaks, or other special favorable treatment on corporations ... when in FACT, my points POINT out the fact that it is a myth created by you
I honestly don't see how. They seem non-sequitar to me. I read and re-reread both your initial blog and your response, and I just don't understand your argument. I can't even say "you're wrong" because I just don't understand how your facts have anything to do with the existence of corporate welfare.
It's like reading:
"Peanut butter is delicious so the monsoon hit Beijing. Therefore there's no such thing as corporate welfare".
Is that a correct statement or a false statement? Who knows? It doesn't make any sense. That's how your argument reads to me. It just doesn't make sense to me.
All I know is that elimination of corporate welfare isn't a left/right issue. It's an issue for anyone who cares about fiscal responsibility and the free market.
As for Steve, you know as well as I do he happens to be a really, really intelligent guy.
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sparechange64
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Sep 22 @ 11:56AM
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OK ... let me try this one more time.
I hear and see complaints by lefty's about corporations - claiming that the corporations are getting off easy or claiming they do not pay any taxes
And so ... I am claiming that, as a general rule - that those claims are false. You will always have the special cases (some mentioned here) ... those are a dozen or a hundred ... there are millions of companies in the USA
- their property taxes are higher than residential property taxes
- they have to pay a corporate tax
- they pay 2-5 times as much as you to YOUR health insurance
- they pay YOUR WC insurance
- they pay YOUR UEMP insurance
then ... unreasonable wages are expected on top of it (like the janitor example) and people wonder why mfg jobs have been leaving
corporations are downsizing to "assembly only" so they do not have to pay this HUGE sum of money ... because other countries do not require it
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iam7545
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Sep 22 @ 10:04PM
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spare - koys post is right! It is not a Dem/Rep thing. You are not defining corporate welfare very well. Welfare is a handout. I will not discuss tax breaks that are extended to corporations as they usually are tied into something. EX - if you hire an inner city person - tax break! Welfare are defined by Social Service Welfare - is - poor guy is hard on his luck - so here are food stamps and cheap rent. Corporate welfare= Company is opening a new distribution center and several states want it in their state - so they give free land and other incentives. As I wrote before usually a Politician gets his pocket lined for making the deal!
I think you need to redefine Corp Welfare!
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kjac
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Sep 22 @ 10:21PM
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I fail to see the difference between corporate welfare and individual welfare, and using the costs of operating a business as justification is no different than an individual saying they should get welfare because they have to buy groceries, pay for gasoline, land payment, etc.
Welfare is welfare. If you're against it, be against ALL forms of it. And on the flip side of it, if you're receiving it, don't be against using it to bribe business.
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