fearlessly proclaiming the truth & the other truth! voice of the teknoshamanic institute
tax loopholes and subsidies for which you dont qualify
Published on June 9, 2004 By kingbee In Current Events
mention of tax loopholes and subsidies as the equivalent of social welfare programs in other blog articles seemed to elicit a chorus of denials such things exist or a condescending concurrence while dismissing any comparison as largely irrelevant. in a sense, there is no comparison. the entire cost of all us social welfare programs in 2000 was 26.4 billion dollars (including administration). estimated loss of tax revenue from just three categories of benefits extended to large corporations and extremely wealthy individuals for the same year was nearly 82 billion dollars.

those categories are capital gains tax reductions, accelerated depreciation and agribusiness subsidies available to tobacco growers (annual average is 18 billion alone; more about that down the list).

as far as tax loopholes go, one of the best is no taxes at all. in the early 90s, 37% of us-based transnationals with assets over $100M paid no US federal taxes; the average tax rate for those that did pay was just 1% of gross receipts.

if you own a small business, you probably cant tie up your operating capital in tax free municipal or utility bonds. pity. those who can don't pay an aggregate total of 9.1 billion dollars in taxes on their earnings.

life insurance companies are allowed to deduct their cash reserves even if they don't pay that amount out in claims thereby avoiding about 7 billion dollars in tax liability annually.

own a ship? you're in luck. agree to let the pentagon use it in time of war and you get 3.5 million bucks a year pretty much free because the us navy has more than enough of its own.

your corporate jet entitles you to landing fees at public airports for much less than commercial carriers pay. like 200 million dollars less for all private jets per year.

if you're a multinational like archer daniels midland, your corporate motto should be CA-CHING. not only are you getting subsidies for growing lots and lots of corn (like your share--like most of-- the 5.5 billion paid out annually) but since the price of sugar in the us is set artificially high, you get to sell tons of the stuff thats making us all as fat as corn fed hogs (notta bad analogy since high fructose corn syrup is a constituent of just about any label you care to check). don't forget the larger part of the 500 million set aside for refining ethanol or your piece of the 1.1 billion the USDA pays out to help market your product internationally.

use of public lands produces a lot of money but very little revenue for the public land owners (you and i).

if youre an oil or gas producer, you get an extra benefit because you can write off 15% of your gross income for depreciation as opposed to the poor fools who can only depreciate their actual equipment costs.

the list goes on and on and on and on

Comments (Page 2)
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on Jun 11, 2004

KingBee: There's a difference between people who just suck in free stuff from the government and not providing anything in return and corporations who employ people, pay taxes, and create products and services.

You need to make that distinction. To use the corn example, yea, that's a case of severe corporate welfare. We agree totally. But there is no comparison between that and social welfare which is money that it taken from one person and literally given to another person for doing nothing. By contrast, corn syrup is what is used in Coca Cola. These companies also employ people who in turn pay taxes on their salaries. 

If welfare recipients, all of them, want to go out and start performing chores for tax payers for their welfare, then we can talk.

on Jun 11, 2004
Ironically, the reason we have agricultural subsidies at all is that small farmers agitated to get them and no one can afford to lose votes in key midwest states where small farmers have a significant percentage of the vote. Ag subsides are a social welfare program that corporations are taking advantage of.

you own a small business, you probably cant tie up your operating capital in tax free municipal or utility bonds. pity. those who can don't pay an aggregate total of 9.1 billion dollars in taxes on their earnings.


How does buying tax free bonds reduce their tax burden? Are companies allowed to magically not pay taxes because they own tax free bonds? I have tax free bonds, and I don't pay taxes on my income from those bonds but I still have to pay my other taxes. Am I taking advantage of corporate welfare?

your corporate jet entitles you to landing fees at public airports for much less than commercial carriers pay. like 200 million dollars less for all private jets per year.


This doesn't even make sense. Are commercial carriers not corporations?

BTW, airpot landing fees are based on weight. What weighs more? A private jet or a 747?

I pay less in landing fees for my 5,000 lb. private plane than commercial carriers do for their 340,000 lb. aircraft.

Apparently I am getting all kinds of corporate welfare! hooray.
on Jun 11, 2004
Awww, now draginol, I'm almost positive my ignorance has some bounds! Now, you know as well as I do that welfare recipients work for the help they get. And that there would be less of them if more communities were in favor of a living wage. Corporate welfare can't even be compared with social welfare.

This is a really good article,kingbee, that I was very happy to see. People need to learn about this.

"The Congress finds that--
~the cost of corporate welfare is estimated to be equivalent to nearly 2 weekly paychecks from every working man and woman in the United States;
~ various private organizations have estimated that the annual cost of corporate welfare to the Federal Government is between $60 and $125 billion, yet no comprehensive public estimate of that cost is available;
~corporate welfare may discourage private sector competition and may even have detrimental consequences to the environment which outweigh the benefits to the corporate welfare recipient;
~some corporate welfare benefits which were initially provided for valid goals have, over the years, become redundant or unnecessary;
rather than diminishing, special interest tax provisions which benefit small numbers of taxpayers are increasing;
~corporate income tax revenues as a percentage of GDP dropped from 1.6 percent in 1992 to 1.4 percent in 2002, while revenues from individual income taxes increased over the same period from 7.7 percent of GDP to 8.3 percent;
~there has been no congressionally-directed systematic review of the multitude of corporate welfare benefits which have been institutionalized in Federal tax provisions or incorporated into other Federal programs; and
~an advisory commission is needed to recommend to the Congress whether some corporate welfare provisions need to be revised or terminated.
Rep. Bernie Sanders on Corporate Welfare. http://bernie.house.gov/documents/opeds/20040318101916.asp
on Jun 12, 2004

Wisefawn, the reason why i say you're ignorant is that you give the distinct impression of someone who doesn't think for themselves. You seem to be driven by emotional reaction and rely on ideologically driven sites to provide you with the info you want. Sites like that prey on people like you to spread their agenda around without really thinking about it (your mercury standard regurgitation is a good example).

The stats you give above are typical. You just post them without really thinking about what they mean.  Corporate tax revenue as a % dropped. Yes. So what? Does that prove corporate welfare exists? No.  Does it indicate that we had a slow down in the economy which resulted in lower profits? Yes.

Would it really take that much effort on your part to simply look at say a pie chart of what the federal government spends its money on? Which pie slice do you think corporate welfare comes from? The huge medicaid slice? Interest on the debt? Military spending? Social security? Medicare? Where?

You just regurgitate figures like corporate welfare costs $60 billion to $125 billion. No basis for that, just an "estimate". Why not just say "Corporate welfare costs Gajillions of dollars!" Same thing.

In 18 days we have to file our federal returns. Since you are so certain about corporate welfare, you should have no problem providing a few instructions on how we can take advantage of tax loopholes, tax shelters, corporate welfare, etc.  That's over 2 weeks for you to figure out and since we're a relatively small company with net profits less than $1 million (i.e. profit less than $1 million) here's the challenge: Get our tax payment under $100,000.  Just let us know which loopholes and tax shelters are readily available. Step by step instructions please.

Because, you see, I keep asking our accountants about these corporate welfare programs, tax shelters, etc. Their response: Largely urban legend. Unless you're one of the 300 or so largest companeis in the United States, odds are you won't likely be able to do anything to help yourself. And even if you are one of those 300 largest companies, odds are that the best you can do is defer some of your tax payments for a quarter or two (and even then you can run into problems if you're publicly traded -- you do know that right? Publicly traded companies have their taxes open to the public).

Do me a favor - THINK for yourself. Don't just wander the net looking for emotionaly gratifying data. That's the kind of person who walks out of a Michael Moore film thinking "People gotta know about this stuff, we must spread the word!"

on Jun 12, 2004
Are homeowners who claim the mortgage deduction placing an onerous burden on us also?

i guess that depends on whether youre among those able to purchase a home? if youre not, and youre unable to deduct personal debt interest to the same extent as homeowners are able to deduct interest on equity refinancing, you might look at it that way wouldnt you?
on Jun 12, 2004
How does buying tax free bonds reduce their tax burden?

i didnt mean to suggest that investing in tax-free bonds reduced earned income tax liabiity per se. the point of a tax-free bond is to encourage investors by sweetening the pot. im questioning the basis for that incentive.

Are commercial carriers not corporations?

the weight-based fee isnt the issue (although the fee structures ive seen graduate upwards so that per 1000 lb rate for your plane is significantly lower than that of a 200,000 gross weight limit aircraft). landing fees for commercial carriers are subject to additional federal excise taxes are they not? additionally, starting in 2004 there is a bonus exemption available to corporations similar--altho considerably more generous--to the suv loophole.
on Jun 12, 2004
here's the challenge: Get our tax payment under $100,000

altho this wasnt directed to me, im curious about what that kinda information would be worth to you?

loopholes_r_us!
on Jun 12, 2004

I simply want to know what legitimate (i.e. legal) methods there are to get that tax burden down. What state or federal programs are there that we can tap into.

What is it worth to me? Well, I've already asked our accountants on it. It only seems to be left-wing ideologues with no real business experience who run around making these claims.  I am asking them to back up their claims. You have Wisefawn running around claiming there's $80 billion or something in corporate welfare being doled out, surely she knows what paperwork needs to be filled out to get some of that.

It just pisses me off to no end being 20 days from writing a check to the "guvment" in the six figure range only to have a bunch of know-nothings trying to tell me how easy corporations have it. 

on Jun 12, 2004
youve investigated the suitability of subchapter s as a first step in that process?
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