“When a single individual or company, or certain groups of individuals or companies, are granted tax favors that no one else gets, a fundamental injustice occurs that distorts free markets, threatens competition, and undermines the economy.”
– Welfare for the Rich
Pulling oneself up by their bootstraps is a quintessentially American expression used to encourage self-reliance in one’s quest for success, yet at the same time, a pejorative phrase used against the poor and needy in suggesting a better path than dependence. But when we take a closer look, we find that all self-made men are not alike. Many at the top have not done the hard work to obtain their advantage in life. Instead, they have relied on shortcuts brought about by currying favor with politicians. By using lobbyists to serve as their agents, they obtain special benefits in return for campaign donations.
Undoubtedly, both the rich and poor use government to their own ends. The poor are given welfare, Medicaid, food stamps, and subsidized housing often in exchange for votes. On the other hand, the rich receive taxpayer subsidies, targeted regulations, tax loopholes, guaranteed loans, preferential zoning laws, and government contracts. But while the poor are often subjected to means testing to prove their ongoing need, there is little to no qualifying for the wealthy, with the lion’s share of entitlements now ending up in the hands of those who need it the least.
In Phil Harvey and Lisa Conyer's 2020 book, “Welfare for the Rich”, the authors provide a comprehensive list of all the advantages that the rich receive using lobbyists, politicians, and community leaders, with both federal and state dollars redistributed in ways that empower the wealthiest individuals and their companies, often without the consent of the public and always at their expense.
One of the biggest transfers of wealth from the poor to the rich took place following the 2008 bailouts of some of the richest banks and financial houses caught in the subprime/affordable housing trap, a government-created crisis. Deemed “too big to fail”, politicians stepped in to provide massive taxpayer bailouts, thus privatizing the gains, and socializing the losses. That is, tax dollars from the public, are redistributed to multi-billionaire private corporations.
Another prime example of concentrated benefits and dispersed costs is America’s sugar program, one of the first incidences of corporate welfare. Lobbyists procure 65 million dollars annually for a small number on the receiving end, while the costs are spread to all US taxpayers. This intervention by the government has caused a doubling of sugar prices in the US and is the reason why so many drinks and foods are made with high fructose corn syrup, an insidious cause of obesity in Americans.
Every five years the Farm Bill is renewed with public support with the mistaken belief that it helps small farmers. To create this misnomer, the food stamp program was cunningly added to the Farm Bill in the 1970s, to use as a cudgel against anyone who refused to support it. But nearly 80 percent of farm subsidies go to the top 10 percent of farm operations, many of them worth billions of dollars. These programs go unchallenged, even though the median net worth of farm households is ten times greater than the average household. In fact, in 2019, 40 percent of farm income was government welfare. To make matters worse, these subsidies for farmers create a price floor for food prices, driving up costs for the poor, and thus requiring more food stamps for more people. Agricultural subsidies are often channeled through insurance programs to hide the fact that the bulk of the grift is going into wealthy hands.
In the housing markets, zoning laws ensure that wealthy enclaves are free of undesirables by driving up costs so high that the poor and working class are financially excluded. By doing so, real estate values are protected while restricting high population density. Steph Curry, the NBA superstar, recently opposed plans for an affordable housing development near his 31-million-dollar mansion in California, fearing safety, privacy, and the potential for lower housing valuation. All too often, money that is set aside for opportunity zones, with the intended purpose of providing a hand up for minority or working-class communities, is redirected into the hands of wealthy real estate developers and used to offset their costs.
In other areas of corporate welfare, individual and corporate billionaires get the public to finance in all or part: stadiums (NFL), warehouses (Amazon), entertainment facilities (Disney), and remote movie sets (Hollywood), with promises of economic revitalization, jobs, and prestige, that rarely materialize. When this happens, the money given to the rich is subtracted from programs for the needy: police, education, and social services. Electric car subsidies are paid by the poor and middle class in increased taxes and then handed to the rich in the form of rebates on purchases of vehicles only they can afford.
The left would have you believe that government exists for the needy. When in fact, the government is likely the greatest contributor to inequality, providing more benefits for the rich than anyone else. The government has unlimited taxpayer money with which to benefit special interests and therefore creates malinvestments by distorting markets. This is the antithesis of capitalism because whenever government money comes into play, people change their behavior to compete for it. Free markets, instead, reflect real costs to determine the best products and services. Focusing on providing a low-tax environment to entice businesses would be far more advantageous. In addition to ending bad programs, we must work to reduce the effects of lobbyists that benefit the donor class, while an informed citizenry works to reduce the size and scope of the government’s control.
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