Corporate Welfare

Full Report in Pdf format

In 1998, oil producers secured legislation that delayed federal regulations forcing them to pay higher royalty fees to Uncle Sam based on the real -- opposed to self-declared -- value of oil they drill from federal land. Active supporters of the legislation included Senator Pete Domenici (R-N.M.), chair of the Senate Budget Committee, Senator Kay Bailey Hutchison (R-Texas), and Rep. Martin Frost (D-Texas), then head of the Democratic Congressional Campaign Committee and now Chair of the House Democratic Caucus. The cost to taxpayers of this continuing undervaluation of publicly owned oil is $66 million annually. During the 1997-98 election cycle, oil and gas producers donated $6.1 million in soft money to the Republican Party and $1.56 million to the Democratic Party -- whose leaders and fundraisers were involved in the delay of federal regulations.

In 1997, former Senator Alfonse D'Amato (R-N.Y.), Chairman of the National Republican Senatorial Committee (NRSC), which collected more than one-third of its funds in soft money, quietly pushed a provision through a House-Senate conference that largely benefited a single company, Alliance Capital, a branch of Equitable Insurance. Alliance Capital obtained a permanent tax break amounting to at least $70 million a year. During the 1997-98 election cycle, Alliance Capital contributed $105,000 in soft money to national and state party committees closely affiliated with D'Amato. Of this amount, $16,000 was given during the days the measure was being actively considered.

Now Congress is about to undertake a $1.6 trillion tax cut proposed by the Bush administration. A tax cut tailor made for the wealthiest in our society, and one in which, a mother of two who earns $22,000 a year would not benefit at all . Meanwhile, the millionaire would get $40,000 in tax relief. A  fair tax cut should  include a credit for Social Security and Medicare payroll taxes, which are the main taxes paid by the 40 percent of taxpayers at the lower end of the income scale, and are not included in Bush's tax proposal. The figures for the disproportionate benefits going to the wealthy are already famous -- and they deserve to be infamous. The top 1 percent of taxpayers pay 21 percent of all federal taxes, but they will get 43 percent of the Bush tax cut -- more than twice their share. 

As for the affordability of this tax cut, the Bush administration quietly acknowledges that at least some of the Medicare surplus of the next 10 years will have to be tapped. Many of our elderly and poor live in squalor, or in abusive under-funded nursing homes. We have a crises that is only going to get worse with the approaching retirement of the baby-boomers. Yet, they make no plans to tap into the feeding frenzy of corporate welfare and pork barrel spending.

 

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