THEY WON'T GIVE UP THEIR TAXPAYER-PAID PERKS:
CEO's Want Balanced Budget, Won't Give Up Corp. Welfareby Janice Shields
CEOs of 91 companies signed a letter to President Clinton, Senate Majority Leader Dole, House Speaker Gingrich and all members of Congress last December, calling on the President and Congress to balance the budget.
Consumer advocate Ralph Nader responded by sending letters to all of the signatories of the CEOs' letter, asking them to identify federal subsidies and tax breaks that benefit their corporations and to select the subsidies and tax expenditures that the CEOs would agree to begin to forego immediately in order to help balance the budget.
More than five months later, and after Nader's Corporate Welfare Project contacted a second time the signatories to the balanced budget letter, none of the 91 CEOs have identified even one federal subsidy or tax break that their companies should give up to help balance the budget.
"This is the ultimate form of corporate hypocrisy," said Nader. "Wealthy CEOs demand a balanced budget, hut refuse to take their snouts out of the federal corporate welfare trough."
Nader pointed out in his letter to the CEOs that if Congress abolished only five subsidies for corporations, $5.12 billion in federal spending would be saved in fiscal year 1996. These five subsidies come from the Export-Import Bank, the Overseas Private Investment Corporation, the Export Enhancement Program, the Market Promotion Program and the Foreign Military Financing Program.
If only five tax breaks for businesses were eliminated, $46.4 billion in additional federal revenue would be collected in 1996. These five tax breaks include accelerated depreciation, reduced rates on the first $10 million of corporate taxable income, the exception to the source rule for the sale of inventory property, tax credits for corporations with income in U.S. possessions and expensing rather than amortizing research and development costs.
Taken together, these ten subsidies and tax breaks alone will total $51.52 billion in 1996; in its annual report, Aid for Dependent Corporations (AFDC), the Corporate Welfare Project identified 153 examples of 1995 federal corporate welfare totalling $167 billion.
The Corporate Welfare Project has identified several examples of subsidies and tax breaks enjoyed by specific companies whose CEOs were signatories to the balanced budget letter.
For example, Eastman Kodak was able to reduce its 1995 U.S. taxes by $37 million due to export sales and manufacturing tax credits. (Kodak s 1995 profits were $1.252 billion.)
Chevron had deferred payment of more than $4 billion in taxes as of the end of its 1995 fiscal year, by using accelerated depreciation; Chevron's 1995 profits were $1,930 million.
Union Carbide received $200 million in Overseas Private Investment Corporation insurance in 1995 for its investment in Kuwait; Union Carbide's 1995 profits were $925 million.
Allied Signal was awarded an Advanced Technologies Program grant for $1.2 million in 1995; Allied Signal's 1995 profits were $875 million.
Janice Shields is coordinator of Ralph Nader's Corporate Welfare Project. She can be reached at the Center for Study of Responsive Law, P.O. Box 19367, Washington, DC 20036; phone 202-387-8030; Internet: email@example.com.
Copyright © 2003 The Baltimore Chronicle and The Sentinel. All rights reserved. We invite your comments, criticisms and suggestions.
Republication or redistribution of Baltimore Chronicle and Sentinel content is expressly prohibited without their prior written consent.
This story was published on Friday, November 8, 1996.