Focus on Corporate Fraud, not the Poor




“Do not judge, so that
you may not be judged.”
Jesus (Matthew 7:1)


Many judge those needing welfare. They rail against welfare fraud. So how does this compare to corporate subsidies, schemes and fraud?

In August, 2009, the conservative CATO Institute criticized fraud from Temporary Assistance to Needy Families totaling $1.7 billion—still less than one percent of TANF’s budget.

Food stamp fraud is often hyped. One Fox News’ headline trumpeted, “Food Stamp Fraud Rampant: GAO Reports.” This is dishonest.

To the contrary, the Government Accountability Office reported “FNS (Food and Nutrition Service) does not have consistent and reliable data on states’ anti-fraud activities…” Contrary to Fox’s “rampant” fraud headline, FNS offers no figures on food stamp fraud.

CATO estimates food stamp fraud is also $1.7 billion, about 2.5 percent of SNAP’s budget.

Even with CATO’s figures, welfare and food stamp fraud total $3.4 billion annually. This is $11 per person per year. Should this consume our anger? A single overdraft on a checking account costs three times as much.

Apart from fraud, many conservatives disparage the programs themselves. Tea Party leaders advocate gutting cash assistance. This is crazy. TANF is temporary—limited to five years in a lifetime—and an essential element of the safety net.

The American Enterprise Institute reports that, even for those in job training, “TANF is failing the non-working poor…. The average benefit amounts are paltry, ranging from $300 to $400 for a family of three.” These non-working poor—only one in six receiving TANF—are either disabled or required to work within two years.

Likewise, decimating food stamps would be despicable. SNAP is doing exactly what it was designed to do, especially during economic hard times: Keep food on the table for 31 million adults and 16 million children.

Do we really want people starving? Do we want to torment America’s most vulnerable families with a survival-of-the-fittest mentality delivering diseases and death sentences?

The government safety net is not some arbitrary reward for being poor; it is a crucial investment in every person’s security which prevents a Dickensian nightmare. A secure safety net also prevents homelessness, a tragedy already afflicting half a million Americans.


Corporate Fraud, Subsidies and Schemes Far Greater

The real travesty is corporate subsidies, tax schemes and fraud. When freed of corporate influence, government does a decent job of efficiently delivering essential services—as low fraud rates attest. But when corporate plutocrats and their lobbyists buy Congress, politicians award subsidies that—for the Fortune 500 alone—cost $362 billion in five years.

As for tax schemes, think Mitt Romney. Economic analyst Dean Baker reports enormous profits, based on clever schemes, allow his firm to escape the corporate income tax. Romney’s tax trickery demolished businesses and destroyed jobs—and communities—for corporate and personal gain.

Moreover, multinational corporations are now stashing $2.5 trillion in U.S. profits overseas, a loss of $875 billion in taxes. Many demand an 85 percent tax break, as in 2004, to ‘repatriate’ these profits. This scheme is economic treason.

Corporate subsidies and tax schemes each cost the U.S. hundreds of billions annually. Corporate fraud cases are a few billion dollars, but Forbes reports prosecutions against 347 companies in the decade through 2007 are a “small fraction” of actual fraud committed.

Altogether, corporations are fleecing U.S. taxpayers of at least half a trillion dollars a year—perhaps far more. If paid, the budget deficit would be eliminated and a surplus achieved.

Corporate loopholes and looting are catastrophic. According to the conservative InvestmentWatchblog: In 1950, corporations paid $3 for every dollar paid by workers—now they pay 22 cents.

The disaster is not government services; not welfare fraud; not the scrimping poor. The disaster is big business bribery; it is corporate fraud; it is the ravenous rich.

These enormous injustices deserve our anger. So let’s focus reform efforts where needed: Outrageous corporate control of Congress.

©2015 Harry Rix. All rights reserved.

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