December 17, 2014
By Neal Tepel
Washington, DC – Taxpayer subsidies awarded to corporations by feederal, state and local governments, are fueling economic inequality. Giant companies owned by billionaires are receiving millions from our government while taking advantage of employees. These low-wage companies receiving high taxpayer subsidies should be encouraged to pay workers a living wage.
About one-third of the individuals in the Forbes 400 are linked to 99 taxpayer- subsidized companies, including every one of the 11 wealthiest individuals and all but two of the richest 25. Subsidies have also gone to 87 companies that pay low wages. More than $21 billion in taxpayer dollars have been awarded to these two sets of firms. Seven retailers appear on both lists.
Those are the major findings of Tax Breaks and Inequality, a report published by Good Jobs First, a non-profit resource center on economic development based in Washington, DC. The report is available at www.goodjobsfirst.org.
"Inequality has many causes, and now we can say development subsidies are among them," said Good Jobs First Executive Director Greg LeRoy. "Subsidies are being awarded to large, profitable companies controlled by billionaires such as Warren Buffet's Berkshire Hathaway while we have too many communities that really need the help."
The members of the Forbes 400 control or are otherwise closely linked to 99 large corporations that have been awarded more than $19 billion in cumulative subsidies, as documented in Subsidy Tracker. Five of the 99 firms have been awarded more than $1 billion in subsidies, including Intel ($5.9 billion), Nike ($2 billion), Cerner ($1.7 billion), Tesla Motors ($1.3 billion) and Berkshire Hathaway ($1.2 billion). The average subsidy total for the group, which is limited to those firms receiving $1 million or more, is $196 million.
Among the individuals on the Forbes 400 linked to one or more of the 99 highly subsidized companies are every one of the 11 wealthiest individuals and all but two of the top 25. These include Bill Gates, whose $81 billion fortune comes mainly from his holdings in Microsoft, which has been awarded $203 million in subsidies; Warren Buffett, whose $67 billion net worth derives from Berkshire Hathaway, which has been awarded $1.2 billion in subsidies; Larry Ellison, whose $50 billion net worth comes from Oracle, which has been awarded $18 million in subsidies; the Koch Brothers, each worth $42 billion from Koch Industries, whose subsidies total $154 million; and four members of the Walton Family, each worth more than $35 billion from Wal-Mart Stores, which has been awarded more than $161 million in subsidies.
"Subsidies are certainly not the main cause of growing inequality," LeRoy points out in the report. "But subsidizing billionaires and low-wage companies is a strong facial connection that our Subsidy Tracker now enables us to make."