Monday, December 9, 2013

Robbing the poor and giving to the rich

The other day I wrote about Black Friday protests at Wal-Mart and the ways in which large corporations shift the burden of paying employees to taxpayers, today we'll take a look at how these same corporations take money from taxpayers to pay executives a king's ransom.

According to a recent report from the Institute of Policy Studies, thanks to changes in the tax code, corporations are able to deduct the cost of "performance-based pay" for executives. In the fast food industry the CEO's of the six biggest public companies averaged over $19 million dollars a year in compensation in 2011 and 2012 with slightly over $15 million of that based on performance. Taxpayers subsidized over $5 million per CEO per year thanks to the tax code.

At the same time front-line fast-food employees are receiving federal assistance to the tune of nearly $7 billion a year.

That's how free enterprise works in the United States. Corporations rely on government tax breaks and subsidies to fill their coffers with cash and distribute it to the highest executives while the people on the ground who do the actual work struggle to keep their heads above water.

But heaven forbid we raise the minimum wage to a level that workers can actually live on. We just can't do it. Where's the money going to come from? We can't possible take it from the suits in the corporate office or from shareholders collecting their rents. Instead we'll leave the workers to fend for themselves as in Victorian England.

So we continue to put the squeeze on the working poor. Meanwhile we have an unemployment rate that is still too high. We have anemic job growth. And we have little manufacturing left in this country.

In order to keep the economy afloat someone has to be able to buy the stuff we make and sell. It's that consumption that makes the wheels turn. But, as we increase the numbers of the working poor and concentrate more and more wealth at the very top of the ladder we are sowing the seeds of our own destruction.

Our economic model is unsustainable. The system almost collapsed of its own weight a few years ago. Only fistfuls of money from the government to the very companies that caused the meltdown kept it running. It was telling that our government was more than willing to back up the money truck to companies on the brink of ruin but that it couldn't spare a dime for the ordinary folks whose lives were cast asunder as the result of something they had no hand in.

Just remember that, at the end of the day, there are more workers than CEO's.


Lee said...

The vocabulary word for what you have described is European feudalism.

Anonymous said...

We're not subsidizing corporations by allowing them to deduct expenses, that is a basic tenant of our accounting system and tax code.

If you want to fuss about corporate subsidies, complain about the handouts used by states, counties, and cities to get companies to locate in a particular area.