Ethics

Corporate Welfare On Display

By Ed Brayton

The Nation has a story that provides a perfect example of how corporate welfare operates, transferring enormous amounts of money from middle class taxpayers to the bank accounts of large corporations. And this one wasn't even done intentionally, it was just an opportunity that the paper industry took advantage of.

Thanks to an obscure tax provision, the United States government stands to pay out as much as $8 billion this year to the ten largest paper companies. And get this: even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry--handsomely--to use more fossil fuel. "Which is," as a Goldman Sachs report archly noted, the "opposite of what lawmakers likely had in mind when the tax credit was established."

Full post as published by Dispatches from the Culture Wars on April 11, 2009 (boomark / email).