Fig. 1 Families with children collecting welfare by race.
Welfare for the Rich and Connected, Deficits for Everybody
With the Trump tax cuts becoming law let's look at the fact the changes were not nearly enough. We could have a balanced budget at any time without a tax rate increase.
The home mortgage interest deduction costs $70 billion a year or $700 billion over 10 years.
The state and local tax deduction (SALT) will cost $96 billion in 2017 and estimated the cost of $1.3 trillion from 2017-2026. Ref. Tax Policy Center.
These two tax breaks nearly all going to the wealthy and affluent will cost $2 trillion over the next 10 years, most of it in the affluent Blue States into the pockets of rich people. The Los Angeles Times (Nov. 9, 2017) calls the loss of this taxpayer kickback a "blow to California." Thus high-cost welfare states such as California, New York, and New Jersey are subsidized by other states - while having the highest real poverty rates. (See below.)
Largest Federal kickbacks, welfare, and tax giveaways for 2016:
Employer paid healthcare: $143.8 billion;
Lower tax rates dividends: $134.6 billion;
Deferral of income from of foreign controlled companies: $108.9 billion;
Contributions to retirement plans: $82.7 billion;
Mortgage interest deduction: $77 billion;
Earned income tax credit: $73.3 billion;
State/local tax deduction: $65.1 billion;
Contributions, earnings from pension plans: $57.4 billion;
Credit for children under age 17: $56 billion;
Subsidies for insurance exchanges: $53.5 billion.
Total: $779 billion. Source: PEW 2016.
Budget deficit 2016: $548 billion.
In fact, we could easily have a balanced budget by just ending a few wasteful public programs such as these. Let's add in wasteful ethanol and green energy subsidies that benefit mainly the rich.
Washington State for example electricity is 8 cents per kWh, but the State pays for a solar panel on the roof of a private home 58 cents per kWh. The owner now pays -7 cents per kWh. plus a Federal check of $6,000 for a 4 kW setup. Total cost for solar welfare tax in 2010 was 88 cents per kWh. Ref. James Conca, Forbes, May 30, 2017.
He has many times my income and my electricity costs well over $1000 a year. When people get these obscene subsidies or the power company is forced to buy this over-priced feel-goodism, my power bill goes up. Washington State taxpayers and ratepayers subsidize or pay a backdoor tax to benefit another affluent person who could buy into this nonsense.
Nuclear gets around 5 cents and coal-natural gas 2 cents. Renewable energy is driving up needless costs and making power production less reliable - and is, in fact, another tax on the public and wealth transfer to the wealthy. In Texas alone the renewable energy subsidy "tax" from 2006-2016 cost all citizens including the poor $13 billion. Source: The Hill Sep. 8, 2017.
The above is many times what we spend on public housing ($61.5 billion much of that pork) and food stamps (SNAP $70.9 billion) and most Federal social programs plus NASA combined.
The latest scam to reduce corporate tax rates to 20% won't help the economy because there's no enforcement mechanism or requirements to do the things that create jobs. Too often money goes into speculation, mergers, or stock buy-backs. Dealing with trade policy and mass immigration is the only real way to get wages up for those that really need it.
Will we get more corporate welfare totaling sometimes millions per job? This has been done in Bristol for years and we get scut-wage retail jobs. Wisconsin recently awarded $3 billion to Foxconn to locate flat screen plant in the state that will take 20 years just to break even - if they stay 20 years. In addition as foreign-owned will most likely escape other/all state/federal taxes.
Where the hell are Trump and the Republicans and Democrats on this? This is the greatest corporate welfare scam ever for a foreign-owned company.
Forbes says, "The U.S. corporate tax system is...creating a substantial economic benefit for foreign ownership - rather than U.S. ownership - of a multinational business." Ref. Lowell Yoder Oct. 9, 2012. Foreigners are awash in corporate welfare at every level. Reuters notes most foreign companies pay no U.S. taxes. The GAO says 72% of foreign and 57% of U.S. companies paid ZERO income taxes at least one year from 1998 to 2005.
ITEP.com notes from 2008-2015 using companies that had no losses at any time during this period:
258 corporations paid not 35% but an effective rate of 21.2%.
8 including G.E, Priceline, PG&E, etc. paid ZERO INCOME TAXES. 48 paid an effective rate of 10% and half paid more to foreign governments then they did to the U.S. (Which was deducted from U.S. taxes!)
Public welfare for business should be treated as income and taxed at the Federal level at 90% even if foreign owned.
The entire claim about corporate tax rates and giving them more tax breaks is a scam - President Trump. How about getting back to borders and cleaning up this costly immigration system?
It is true over half the population doesn't pay Federal income taxes, but that is deceptive. The company moving to Wisconsin is getting $3 billion from state residents through their State/local property/income taxes or lost services elsewhere, this company will dodge taxes on that $3 billion, or at worse pay 20% under the Trump tax scam, likely ZERO again.
How many foreign workers will they bring in?
Working people pay tons of taxes through depressed wages caused by government open border policies knocking the bottom out of the labor market, while paying more in state/local taxes for welfare programs to support low-wage workers, single mothers, etc. and yes most immigrants legal and illegal.
Wage depression like Wisconsin corporate welfare scam for Foxconn is another tax and massive backdoor transfer of wealth to the top while shifting the cost onto the public. Studies show mass immigration causes a loss of $300 billion in welfare, etc. (paid for by the public) and over $500 billion in lost/transferred wages from working people to business. The New York Times reported the outright cost of corporate welfare taxes to state citizens is almost $90 billion a year with Texas leading the way.
Yes, government-engineered depressed wages to shift wealth around is a tax just as the Obama Care Mandate is a cruel tax forcing one party to pay the cost of another even if the wealth transfer is through a private sector health insurer - who gets further benefit from taxpayers.
According to the US Census' Supplemental Poverty Measure that deducts the cost of living and adds transfer payments to income, the highest poverty states are California 23.8%; Washington DC / Northern Virginia 22.7%; Nevada 19.8%; Florida 19.5%; Arizona 18.8%; Georgia 18.2%; New York 18.1%.
West Virginia and I'd say Southwest Virginia as well is around 12%. Why is this? Mass immigration (over 90% of immigrant Hispanic families regardless of legal status collect welfare) and black victims of mass immigration being pushed out of the labor force, plus population driven inflation:
The Census Bureau "at the urging of the National Academy of Science and others, in 2010 began calculating a Supplemental Poverty Measure as a way to create a more nuanced picture of poverty in America...the Supplemental Poverty Measure (SPM) - that uses a wider range of factors than the official federal measure to determine poverty status." 28.2% of Hispanics and 25.4% of Blacks live in poverty. (PEW, USA Today)
If the Democrat Racialist Socialism Party could put aside inciting anti-white racial hatred and address these issues we would be better off. We already have too much wealth redistribution and it's time the get back to a truly free market and personal responsibility - with perhaps a small safety net. End all public subsidies and tax breaks, tax all income from whatever source from EVERYBODY, and simply lower the rates.
The role of government should be limited to health, safety, and national defense and what is written in the Constitution. End all social and statist economic engineering.
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