Republicans are always carrying on about the need to cut federal spending to reduce the deficit. One of their favorite targets is government programs that help the poor, like food stamps and housing assistance.
However, when it comes to corporate welfare they remain silent, even though government spending on that end of the spectrum nearly doubles the amount that goes to America’s neediest citizens. The government spent about $59 billion to pay for traditional social welfare programs in 2006, while at the same time doling out $92 billion in assistance to corporations, according to an analysis from Think By Numbers, a progressive blog.
While Mitt Romney criticizes President Barack Obama for fostering a "government-centered society," the fact is the nation’s riches corporations are just as guilty of reaching into the government trough. Harold Hamm, Romney’s top energy adviser, asked lawmakers to keep tax breaks for oil and gas companies in place during a hearing earlier this month, according to a report in the Huffington Post. And companies tied to Romney’s image have also benefited from government help; Bain & Co. reportedly received a bailout in the early 1990s.
Obama has proposed lowering the top corporate tax rate to 28 percent in exchange for a reduction in potential loopholes, according to The New York Times. Many corporations already pay well below the current 35 percent rate by using a variety of loopholes.
Last week, just a few days after a video emerged of Romney discounting 47 percent of the American public because they don’t pay income taxes, Senate investigators revealed that many multinational corporations have avoided billions in U.S. taxes by shifting profits offshore and taking advantage of weak, ambiguous sections of the tax code, the Associated Press reports. Overall, investigators said more than 1,000 companies reported having more than $1.5 trillion overseas.
For example, Microsoft used "aggressive" transactions to shift assets to subsidiaries in Puerto Rico, Ireland and Singapore, in part to avoid taxes, said the report by the Senate Permanent Subcommittee on Investigations. The report also said that since at least 2008, Hewlett-Packard Co. has used complex offshore loan transactions worth billions of dollars to avoid paying taxes while using the money to run its U.S. operations.
Executives of both companies said they have complied with American tax laws. But just because it’s legal doesn’t make it right. And if the law allows them to get away with such financial shenanigans, then the law should be changed. If we were able to tax that money it would put a significant dent in the deficit - and by a lot more than cutting programs designed to help the poor and elderly.