Why Corporations are the Real Welfare Queens

Updated: Aug 20

You would be hard-pressed to turn on any conservative media outlet and hear that impoverished American people aren’t lazy or greedy. The fallacy of the “welfare queen” is a holdover from the 1980's Reagan Administration. In recent years, Ronald Reagan has been the neo-conservative and pro-fascist Messiah of American capitalism…and while Joe Biden may not be the sharpest tool in the shed, he certainly isn’t “senile” in contrast to Reagan who actually had Alzheimer’s—a fact that would only become public in 1994.

It is likely that you have heard the following phrases, if you have been in any proximity to any conservative in recent history:

"People are buying steak and lobster with their food stamps.” "Nobody wants to work.” "People are having children just to get money.” If you are a person who hasn’t had the pleasure of being poor, or starving, then these “facts” as presented are really quite shocking. The poor are living in luxury, eating steak and lobster, rent free, getting paid to have children, while YOU, the hard-working American go to a job five to six days a week and can still barely make ends meet. Worst of all, these freeloaders are using your tax dollars to supplement their lavish lifestyles. Who do these poor people think they are?!


The Facts

What your conservative grocery store hawks seem to be missing or willfully ignoring is the statistical analysis to back up their very bold and very inaccurate depictions of the poor. Statistics on the matter, such as those listed below courtesy of www.povertyusa.org are readily available, though they may not be broadcast on Breitbart or Fox News:

  • “In 2018, 16.2% of all children (11.9 million kids) lived in Poverty USA—that’s almost 1 in every 6 children.”

  • “5.3% of the population—or 17.3 million people—live in deep poverty, with incomes below 50% of their poverty thresholds.”

  • “29.9% of the population—or 93.6 million—live close to poverty, with incomes less than two times that of their poverty thresholds.”

How does the government define terms like “poverty” or “deep poverty” or “poverty threshold”? Just because 11.9 million children are poor doesn’t mean they aren’t still getting free things, right? That’s what Ben Shapiro told you, and he knows all about being poor because he went to Harvard and studied it...well, he studied political science, which is pretty much the same as using analytical statistical driven social research data and his conclusions are not simply based on his own observations, which primarily exclude physical interactions with the poor and substitute right-wing media echo chambers…right? To start to understand poverty, we need to understand the terms and how they relate to a person's individual or combined income.


Poverty

The United States Census Bureau defines poverty in the following manner: “If a family's total income is less than the family's threshold, then that family and every individual in it is considered in poverty.” Clear as mud. The Bureau goes on to give the following example:

Situation

Family A has five members: two children, one mother, one father, and one great-aunt. The family’s 2019 poverty threshold (below) is $31,275. Suppose the members’ incomes in 2019 were:


- Child 1: $0

- Child 2: $0

- Mother: $11,000

- Father: $11,000

- Great-aunt: $10,000

- Thus, Family A’s total income for 2018 was $32,000.


The total family income divided by the poverty threshold is called the Ratio of Income to Poverty. Income / Threshold = $32,000 / $31,275 = 1.02 The difference in dollars between family income and the family’s poverty threshold is called the Income Deficit (for families in poverty) or Income Surplus (for families above poverty).

Income – Threshold = $32,000 - $31,275= $725 Since Family A’s total income was greater than their poverty threshold, they are considered not “in poverty” according to the official definition. So, because the family is turning a $725.00 profit every year, on paper, they therefore exceed the poverty threshold (defined as the minimum amount required to sustain life) and are not considered to be an impoverished family. Just to recap: A family of five, living on a combined yearly income of $32,000 are not considered poor. I’ll tell you this much, friends: If I were living in that household, I’d be the first to give that Great-aunt the boot so I could pick me up some of that free government lobster that Tucker Carlson keeps telling us all about.


Deep Poverty According to (UCDavis.edu) "The U.S. Census Bureau defines ‘deep poverty’ as living in a household with a total cash income below 50 percent of its poverty threshold. According to the Census Bureau, in 2016 18.5 million people lived in deep poverty. Those in deep poverty represented 5.8 percent of the total population and 45.6 percent of those in poverty. While poverty thresholds vary by the size and household composition, for a single individual under 65 years old, deep poverty would be an income below $6,243 in 2016. For a family of four with two children, it would be $12,169.50,”

The Census Bureau, however, cannot own the rights to the dogmatic language so they may determine who is or who is not deeply impoverished. To put deep poverty in simpler terms and to give it a more finite classification, The World Bank, for instance, defines a deeply impoverished household as one that is “…living on $2 a day per person or less,” (UCDavis.edu).


TANF / SNAP / SSI Programs and American Taxpayer Cost

While conservative Americans define “welfare” as receiving “free money from the government because people don't want to work", this definition doesn’t jive with reality. I know, you can unclutch your pearls. To understand the term welfare we must first know that American welfare consist of three basic programs: 1. TANF (Temporary Assistance for Needy Families) - Passed 25 years ago, TANF is specifically cash assistance for impoverished families and according to the Center on Budget and Policy Priorities the, “TANF average monthly caseload has fallen dramatically even as poverty and deep poverty (incomes below half of the poverty line) remained widespread.” Additionally, the Center on Budget and Policy Priorities reported that, “In 2019, 2.9 million single mothers did not work for pay, yet only 1.1 million families received TANF at some point during that same year. This suggests that many non-working single mothers may not have access to the employment opportunities and work supports that TANF is supposed to provide”


Welfare Rate in America

2. SNAP (Supplemental Nutritional Assistance Program) - Also known as “food stamps” this benefit supplies impoverished families and individuals (including the elderly) with money specifically to purchase food, you know, so they don't starve and all that. The Peter G. Peterson Foundation states that SNAP averages, “$130 per month (or $32.5 per week) per person in benefits.” Wait a minute? How could anyone afford to buy steak and lobsters on $130.00 a month? The answer is simple: They can’t. But that doesn’t stop conservatives from repeating the fallacy that the poor are out there Lobsterfesting it up. You don’t need to have a PHD in Economics to understand that a person cannot buy lobsters and steak on a $32.00 a week food budget.


3. SSI (Supplemental Security Income) - A program directed at assisting the elderly and the disabled poor with supplemental income so they may survive.

Cost Now that we have a better understanding of the welfare programs in this country, what do we, as God-fearing American taxpayers, shell out for them? TNAF, SNAP, SSI and Earned Income Credit account for about 10% of federal spending, whereas, our spending on defense hovers around 16%. The idea that working Americans above the poverty line (which we’ve demonstrated is subjective and ridiculous) must shell out a majority of our tax dollars to help the “needy” is bogus. We spend more designing weapons, or paying private contractors to design weapons, and fighting endless wars, than we do helping our own citizens. This then begs the question of our national debt, which the conservatives attribute to the non-working, luxuriously overdressed, lobster-eating poor. But what about the rich? What about the companies that are making the drones? Where do they come into play?


Corporate Welfare

George Mason University decided to take a look at the true cost of corporate tax dodging by looking at the current tax code. “The tax code presents its own set of issues. The Congressional Budget and Impoundment Control Act of 1974 defines tax expenditures as ‘those revenue losses attributable to provisions of the federal tax laws which allow a special exclusion, exemption, or deduction from gross income or provide a special credit, a preferential rate of tax, or a deferral of tax liability.’” What a mouthful. Essentially, if one is able to decode the bureaucratic language of this act, they soon realize that large corporations are receiving subsidies *cough welfare cough* from the government to cover the costs of running their businesses, whether they are able to run them well or straight into the ground.

Additionally, not only can corporations write off many line items that us regular folk bite the bullet on, some even go as far as receiving rebates from the government…wait a minute…that can’t be true. This would mean that corporations would be receiving government hand outs and we all know that corporations make money selling goods and services. We also now know that corporations are definitely above the poverty line, and they certainly aren’t in deep poverty. So, who exactly are these faceless impoverished corporations receiving the entitlements?


On April 2nd of 2021, Fortune.com reported that, “55 major companies paid $0 in federal taxes on their 2020 profits.” These companies include, but are not limited to, Nike, FedEx, Archer Daniels Midland, and Salesforce. Fortune estimates that, “If those 55 companies had paid the statutory 21% corporate tax rate on their 2020 profits, their collective tax bill last year would have amounted to $8.5 billion…Instead, they received a combined $3.5 billion in tax rebates.”


Man. That’s a shitload of steak and lobsters.


But these are American businesses and corporations. These are, what Republicans call “job creators” who will take profits and invest them into their own workforce. They will undoubtedly do the just and Christian thing by helping others who many be at or below the poverty line find employment and pull them out of the depths of poverty…Correct? This is America and the job creators honestly care about working American people. They would never, in a million years take taxpayer dollars for the sole purpose of enriching their own lives and personal wealth because that would, in turn, make them guilty of being welfare queens. Corporations have never, in the history of this country, defrauded or misled the American public. They don’t hire Public Relations firms to guide the American people’s perspective into believing that their personal mass consolidation of wealth obtained by taking our tax money is good for the economy. Also, Walt Disney was a saint. He made cartoons and loved everyone, especially Union workers and people from all cultural backgrounds.


Trump Tax Cuts and Stock Buybacks

In 2017 the corporate tax rate was permanently cut from 35% to 21%. This cut was courtesy of Donald Trump and the Republican Party under the guise of the Tax Cuts and Jobs Act of 2017 (TCJA). Those of us who weren't blinded by celebrity weddings or bombarded by the ever-shifting breaking news cycle may recall that the incentive for this new tax program was job creation. That’s why it was called the fucking “Jobs Act”. I can distinctively recall economists at the time saying that they weren’t sure of the benefits of the tax cuts, and we wouldn’t know whether or not these cuts would be a net gain for the American people until after the cuts were initiated. Pro-Trump Economists stated that the tax cuts would “pay for themselves”. Some economists at that time vaguely cautioned that Americans were essentially gambling with the opinion that corporations would do the right thing…which historically, they had never done. There wasn’t anything in the act which required corporations to hire more people or invest in their workers. There wasn’t anything in the act that threatened to restore the tax cuts to their former percentage if corporations didn't make good on their promises. And as we all know by now, when corporations are publicly called out on their failures by Senators, the response is usually, “We are following the law as it is written. If you want us to do it differently, then you need to change the law.” Beyond speculation, we can now see the result. We are now living in the future and can report back. How did the American people fair after the passing of the Tax Cuts and Jobs Act of 2017? According to americanprogress.org, “Instead of substantially increasing investment, the windfall businesses received largely went to paying off wealthy investors. One analysis of Fortune 500 companies found that just 20 percent of increased cashflow in 2018 was spent on increasing capital expenditures or research and development. The remaining 80 percent of cashflow went to investors through buybacks, dividends, or other asset planning adjustments.” But corporations made more money—and that should be a great thing for the American economy, right, because more money for anyone in America is always good for the overall economy? I mean, it's probably not good if it's revenue that the American people are losing...you know, money that could go to building bridges, or educational institutions, or those socialist roads with toll booths. It would appear that conservative Americans never stopped and thought about how the American people would make up for the loss in tax revenue and why would they when they were being promised an influx of better paying jobs? So, the taxes were cut, the money went out, the jobs were never created, the economists said “we sorta’ told you so” and the national debt exploded…so much so, in fact, that SNAP benefits for the impoverished were cut by then President Trump, even though we all know now that SNAP only makes up a fraction of the 10% of total federal spending and these cuts could never close the corporate tax wound that was now bleeding America dry.


According to americanprogress.org, “The U.S. Treasury reported that from fiscal year 2017 to FY 2018, the federal budget deficit increased by $113 billion while corporate tax receipts fell by about $90 billion, which would account for nearly 80 percent of the deficit increase.

The Brookings Institute, after investigating the impact of the TCJA, found that “the tax cuts did not pay for themselves” as was initially promised by the Trump Administration. Shocking, I know.


Worker vs CEO Pay

While the deficit continues to balloon, it is important to look at salaries. If American workers are to stay above the poverty line, then they must maintain wages that increase steadily alongside inflation. I'll give an example: Lets say that the price of a Snickers Bar was $1.00 in 2019 and then it increased to $1.05 (or 5%) in 2020. The person buying a Snickers Bar must find a way to supplement the cost of the increase. They could, of course, stop buying Snickers Bars, but what if the price of everything increased? If that were the case, then the average worker would need a raise of 5% every year to just keep up with the rising costs of products, gasoline, utilities, rent, ect. (Note: If 5% seems high to you, I'd like to point out that according to Tradingeconomics.com the inflation rate in July of 2021 stood at 5.4%). So, with the increasing costs of goods and services, the question then becomes the following: “How much did the average worker’s wage increase in 2020?” (By the way, Snickers Bars are now the smallest in size that they have ever been.)


According to fastcompany.com in 2020, “…the average worker’s compensation rose just 1.8%.” But that’s okay, because fastcompany.com found that while the average American worker was getting boned, the pay for CEO’s rose to 16% in 2020 and “For the firms that retained their same CEO all year, the difference was even greater: 341.6-to-1” or 341.6 lobsters for every 1 lobster.


Who We Are vs. Where We Are

It should come as no shock to most Americans that we are not entering into a dystopian future, but we now reside within it. When the head of a company makes the salary of their average worker in a single day, we must recognize the price to the worker of that CEO's extreme wealth. We should not be angry with the poor for failing to live up to 1950s American expectations if we are not keeping up with the cost of inflation and are moving their salaries into the pocketbooks of a small group of people. The Poor are not the problem: Poverty is the problem and being poor is a symptom of many different socioeconomic variables. Americans should now understand that they were conned into a deal that promised to create more jobs and improve the lives of their citizens. Promises were broken. Economists lied. The deficit grew, and the poor and working class are the group who pay the price (as per usual) while the wealthy continue to store as much money as they possibly can, wherever they want, outside the clutches of the IRS or US Federal Government.


So the next time you hear a conservative tell you that the impoverished are ruining this country, remind them that the former CEO of Enron Ken Lay flew HW Bush to his son’s presidential inauguration using his own private jet. Let it be known who the real welfare queens are. Beware of snake oil salesmen like Tucker Carlson, Ben Shapiro, or Bill O’Reilly, or anyone who would have you believe that we live in the greatest country on Earth while nearly half of all the children in America are on government assistance.


Use these stats. Use this information. Do not be afraid of conflict or truth. As the great author Harlan Ellison once said, “You are not entitled to your opinion. You are entitled to your informed opinion. No one is entitled to be ignorant.”

150 views

Recent Posts

See All