Efficiency versus Transparency

A couple of days ago, a friend re-posted a FaceBook meme–one of those numerous sardonic messages on what appear to be digital postcards. The message was  “for all the taxes they take out of my paycheck, the least they could do is send me a picture of the ghetto family my tax money is supporting, to hang on my refrigerator.”

My friend’s response was perfect: “Here you go: Here are pictures of Walmart, Kaiser Permanente, Citibank, BP…”

Leave aside, for this discussion, the casual racism (we know what “ghetto” meant) and the mean-spiritedness, the implication that lazy “takers” are being supported by self-styled,  hard-working “makers.”

What the statement really reflected was a widespread lack of understanding of corporate welfare, and the magnitude of the tax dollars flowing to profitable companies through the tax code.

Let’s stipulate that some of these subsidies can be justified. (Others not so much.) Let’s also stipulate that it is more efficient to subsidize an activity through the tax code than through a grant. (Why send money to the federal government and then have that government send it back?)

Let’s also stipulate, however, that there are situations in which transparency should trump efficiency. This is one of those situations.

Every time lawmakers vote to make what CPAs call a “tax expenditure,” that credit or deduction represents money otherwise due to the federal government that it doesn’t take in. The process is more efficient, but the fiscal impact is no different from a payment out of the treasury.

What is different is the ability of the public to monitor the decision to subsidize and to evaluate the justification for the subsidy.

What the federal government pays out in TANF or SNAP is visible; what it pays to GE or Exxon or Walmart is buried in the bowels of the Internal Revenue Code.

If we insisted that all corporate welfare payments also be paid in cash, in the full light of day, we might be able to begin a reasonable discussion of the merits, magnitudes and justifications for those subsidies.

It probably would be news to the people who posted that vile Internet message, but they are supporting a whole lot of people who not only aren’t “ghetto,” but who are pulling down salaries most of us ordinary “makers” can only dream of.


  1. I whole heartedly agree, the amount of subsidies handed out and to whom would shock a whole lot of folks! They would see the true depth and breadth of the “takers”.

  2. MJane; lets begin by demanding the amount of tax subsidies received by the countless businesses owned by the Koch brothers. That should take some time and add up to a goodly sum as we continues covering these tax subsidies on low, minimum wage or middle income subsistence levels.

  3. We COULD just start with the largest and most wasteful of these tax code gifts. Lets start with the Gas / Oil / Coal Companies. There is NO REASON for ANY Tax benefits to these companies. Lets start where we can nearly ALL agree. Do the most profitable corporations in the history of corporations really need TAX Gifts? Does Walmart? We have to start somewhere.

  4. “If we insisted that all corporate welfare payments also be paid in cash, in the full light of day, we might be able to begin a reasonable discussion of the merits, magnitudes and justifications for those subsidies.”

    This is an absolutely excellent idea!

    However, my cynicism tells me that those powerful corporations will make sure this never ever happens.

  5. The proper starting place would be the non-profits. The most profitable enterprises in the U.S of A.

    Know how much the CEO of Goodwill made last year?

  6. Another ‘freebie’ are companies which produce polluting products and don’t have to clean up. Look at plastics. The only reason they are so cheap is because the manufacturers don’t have to set up any real recycling efforts to clean them up out of the environment. Or subsidizing corn. It is so supported by federal payments that crop dusting is again economically viable. As someone who frequently rides my bike, that’s INSANE. And what about all the municipalities who mosquito fog? The WHO doesn’t recommend fogging in ANY circumstances, and they deal with some atrocious and dangerous mosquito infestations. But the town I live in absolutely refuses to give up on this, at best, waste of money, and at worse, contributor to environmental illnesses like asthma, heart disease, and several cancers. Europe forbids many of these cancer causers–why? Because they have universal health care and they like to keep costs down. Duh!!! But we have a for-profit health care system. The more you poison the population the more services need to be provided.

  7. “lazy “takers” are being supported by self-styled, hard-working “makers.””

    Sheila segued from this theme to corporate welfare and made her typically clear point in that theme.

    But I wanted to point out that both themes are part of the same script. In order to obscure corporate welfare the puppeteers have to first jerk the media strings to the puppets, to get them to react to those “others” eating the lunches of hard working Americans.

    Remember Mitt Romney’s infamous 47% are takers? If you eliminate those of us that are merely withdrawing what we saved for through Medicare and Social Security and those who are unarguably unable to work due to old age and illness and handicaps what’s left are mostly the adults and their children who are underemployed by businesses geting away with paying a below living wage. In other words more corporate welfare disguised as social welfare.

    The bottom line is that what we pay for social welfare that’s not really corporate welfare is chump change. But the puppeteers job is to lead America to believe otherwise. And the worst thing about all of that is when they pull a media string we jump. Or at least a large portion of us do.

    We are the bit players in a movie about royalty. Acting our prescribed parts while the aristocracy divies up what we produce.

    We have lost after 250 years the Revolutionary war. What King George couldn’t accomplish with his armies Roger Ailes and the Koch Brothers have accomplished with media technology.

    Those of us who have escaped the programming have to re-fight the Revolution hopefully this time using democracy instead of musket and canon.

    Taxation without representation is tyranny and we’ve watched while the Supreme Court gave our representation and our tax revenue to oligarch led corporations.

    The famous “Les Miz” line “to the barricades” is necessary yet again.

    Let’s see if we’re smart enough to fight this revolution ideologically rather than physically.

  8. Here in Indianapolis the welfare Kings would be owners of the Pacers and Colts. Easily over a billion dollars of tax payer money has been spent on building stadiums for the Colts and Pacers, the upkeep plus various other freebies.

    The Star and the other newspapers here, and the TV Stations all avoid calling the Pacer-Colt Schemes Corporate Welfare. They have relabeled it an investment, an investment that we taxpayers never receive a dividend on. The Professional Sports scheme of Corporate Welfare is not issue for either of our Mayoral Candidates or anyone running for the City-County Council.

    The 1% control the McMega-Media including distribution and content. It reminds me of the intro to the old Sci-Fi series Outer Limits – “There is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image, make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. For the next hour, sit quietly and we will control all that you see and hear.”

  9. Louie, the scariest metaphor yet to the mass media control we have accepted under the guise of entertainment!

    Thanks. I think.

  10. Tangentially related to today’s topic.

    Something to think about.

    Academia is generally considered as the most liberal of institutions. That those whose lives are centered around the production, gathering, and distribution of knowledge view the world typically as preparation for an ever better future rather than protecting a forever diminishing past.

    My experience is that this is a valid presumption at the teacher level.

    However narrow the focus to the administration of institutions of higher education in America and a different picture emerges.

    Now we’re looking at very corporate behavior of make more money now regardless of the cost to others.

    Of course economics offers the solution to this behavior. Higher education like healthcare is asking to be socialized and we will because nobody has offered an alternative and both are critical for the future. When and how and who and where are still unknown but what is clear by the failure of capitalism to serve the needs of we the people.

    We are economically democratic as well as politically and will fire the the parts of the economic system that do not provide and hire the one that does.

  11. Because “The Gopper” needs something with a little more substance like: Should Lowes stop selling Timber and Nails, because it might offend Christians …

  12. Here’s a thought! Institute the fair tax and eliminate all corporate welfare entirely and the influx of capital would create unbelievable growth.

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