We need corporate welfare reform not LePage's propaganda

Editorial by Ramona du Houx

It’s high time reasonable people who believe in a caring, compassionate society take the reins of the welfare issue. The majority of the people who live in Maine are community oriented and believe in the common good. It shows in their actions: when someone is in need, spontaneous fundraisers happen. The people of Maine are well known for volunteering and being inclusive. So why has Governor Paul LePage gotten so much traction attacking the less fortunate who live among us? They are our friends, our neighbors, not sketchy criminals intent on committing welfare fraud.

The reality is that the welfare programs LePage points to as being “abused” and a drain on Maine’s budget aren’t even paid for by Maine. One hundred percent of the funding for food stamps (SNAP) and Temporary Assistance for Needy Families (TANF) comes out of the federal budget—which amounts to less than 0.47 percent of the overall national budget.

The truth is: Maine in no way is not rife with welfare abuse. The vast majority of Mainers are honest, hardworking souls. Fewer than one percent of residents receive TNAF. As of May, 2015, only 15 percent of Maine residents took part in SNAP, with an average food-stamp benefit of $116 per month. Most apply to help feed their children, whose access to food stamps bolsters their health and economic prospects as adults.

Haven’t you had enough of the LePage rhetoric? “Welfare abuse” is the big lie.

Right-wing propaganda machines nationally and here in Maine continuously repeat lies. Sometimes, they have been able to achieve extreme goals. LePage often uses the same tactics that have been used nationally. He used the poor as scapegoats to misdirect the media into over-reporting the nonissue of welfare abuse. It was his ticket to reelection.

Of course, in the private and public sectors there are cheaters, but within the federal government’s welfare programs they are rare. A recent U.S. Department of Agriculture report on SNAP trafficking shows that between 2009 and 2011, just 1.3 percent of all benefits were traded at a discount for cash.

The fact that welfare abuse is rare should be the headline.

Most people who receive benefits are children or disabled or retired or they are among the working poor. Too many have been forced onto welfare, working full time at minimum-wage jobs.

It’s not the fault of the working poor that middle-class wages have stagnated. But keeping the minimum wage too low for folks doesn’t help the middle class. Studies have shown that if you raise the lowest wage, the ripple effect is such that other wages go up, too—raising everyone’s quality of life.

Perhaps out of frustration, too many of us have blamed the poor for the stagnation of their own wages, thinking that welfare takes a huge portion of our tax dollars.

According to Paul Buchheit, a college professor and author of American Wars: Illusions and Realities, in 2012 the average American taxpayer making $50,000 per year paid just $36 towards the food-stamp program, which amounts to ten cents a day. And when it comes to funding the rest of America’s social-safety-net programs, the average taxpayer making $50,000 a year pays just over six dollars a year.

The bottom line is: we aren’t paying much for social-safety-net programs.

We don’t need “welfare reform” that targets the working poor, elderly, children, and the disabled.

We do need corporate welfare reform.

In Maine we are still climbing out of the Great Recession—a time that saw the need for SNAP jump to 1 in 6 Americans. The LePage administration has diverted attention from the fact that Maine’s economy has stagnated because of his policies—like giving tax breaks to the top 1 percent, a measure that hurt everyone but Maine’s wealthiest. And corporate investors have walked away with millions of dollars in state tax credits on false promises of job retention.

A Maine Sunday Telegram investigation found that neither the $31.8 million loan, managed by Cate Street, nor the $8.2 million in equity investment—which was the basis for two investors receiving state tax credits—actually paid for improvements to the Great Northern Paper mill that shut down in 2014. Instead the funds were returned the same day to investors, never going into the mill for changes that could have saved jobs, and Great Northern filed for bankruptcy later that year. Hundreds of jobs were lost after workers were given false promises. At that time, Eliot Cutler criticized the tax credits, calling them “corporate welfare and crony capitalism at its worst.”

Some six in ten Americans in a Pew Research survey said they were bothered greatly by the feeling that “some wealthy people” and “some corporations” don’t pay their fair share in federal taxes. While only 27 percent cited their own tax bills as something that bothered them. As it turns out, those feelings have solid statistics backing them.

The conservative Cato Institute estimates that the federal government spends $100 billion a year on corporate welfare.

Corporations are funding a smaller share of overall government operations than they used to, even though profits skyrocket. According to the Pew Research Center, in fiscal 2014 the federal government collected 10.6 percent of its total revenue from corporate income taxes. Back in the 1950s, corporate income tax generated between 25 to 33 percent of federal revenues.

Corporations also dodge taxes by running income through subsidiaries in low-tax foreign countries, taking jobs overseas.

Buchheit said the average American family, earning $50,000 per year, pays $6,000 a year in subsidies and grants for corporations—$6,000. Compare that to the $36 that same family pays for food stamps annually.

“Overall, American families are paying an annual $6,000 subsidy to corporations that have doubled their profits and cut their taxes in half in ten years, while cutting 2.9 million jobs in the U.S. and adding almost as many jobs overseas,” said Buchheit.

While the subsidies for big oil companies fuel global warming, other taxpayer funds go to making up for revenue losses from corporate tax havens. Giant transnational corporations like General Electric that hide their money overseas to boost profits and avoid taxes create these losses. In the past decade alone, throughout the Great Recession, corporations have doubled their profits.

We can’t afford to give $100 billion to corporations that should be paying their fair share. The average American family could use that $6,000 for their quality of life.

Corporate welfare should be where We the People direct our outrage.

It’s time to bring an end to corporate welfare and to make corporations pay their fair tax share.

We could use some of those dollars to help those Americans who need it the most, stimulate the economy, and help relieve college-student debt, while lowering the average American’s tax burden.