MADISON, Wis. -- Politicians trying to balance the federal budget needn't look too far. Eliminating large tax breaks and subsidies for corporations would go a long way in cutting federal spending.
About $150 billion could be saved annually by making corporations pay their fair share of taxes and eliminating their subsidies. That would wipe out the yearly federal deficit of $130 billion -- with a $20 billion surplus.
Almost 60 percent of U.S. corporations and 74 percent of foreign firms doing business in the United States paid no federal taxes in 1991, according to the Boston Globe. Business interests defend their federal tax breaks by arguing that the money is used to increase the number of jobs, and is increasingly necessary to compete in the global market.
Let's get real: Taxpayers should not pad profits for big businesses.
IBM, a company that made $11 billion in foreign profits, paid no U.S. taxes on these earnings in 1994. In 1995, the federal government gave $300,000 to the Disney corporation to improve its fireworks shows, and $2 million to McDonalds to market Chicken McNuggets in foreign countries.
U.S. taxpayers ultimately foot the bill for these and other extravagant tax breaks for corporations that do little for the public good. Some corporations have rewarded states that gave them substantial tax breaks by moving their companies to other states or even abroad, taking their jobs with them.
As consumer advocate Ralph Nader says, ''If the kind of cost-benefit analysis that corporations want applied to regulation were to be applied to corporate welfare, Aid to Dependent Corporations would be a thing of the past.''
A broad coalition
Surprisingly, Mr. Nader, a noted liberal, has found allies on the Republican side of the aisle. Chairman of the House Budget Committee John Kasich, R-Ohio, and Sen. John McCain, R-Ariz, have united to put together a list of recommendation for eliminating federal subsides. The group's recommended cuts of $11.5 billion over five years, however, are far short of the $300 billion in cuts that economist Robert Shapiro of the Progressive Policy Institute recommends.
Any cuts will be hard fought. Agribusiness, tobacco industries, oil and gas corporations, sugar and timber industries -- all recipients of large federal subsidies -- maintain an army of lobbyists who work to protect their interests. Few elected officials want to cut government funds from corporations operating in their states, nor do they want to antagonize the business interests that contribute to their campaigns.
But they must. If we're serious about balancing the budget, we should eliminate the massive federal subsides and unnecessary tax breaks doled out to America's wealthiest companies. It's time for corporate America to tighten its belt and pay its fair share of taxes, as the rest of us do.
Ray Santisteban is a visiting scholar at the University of Wisconsin.
Pub Date: 3/04/97