First, though, some questions. Why is AEP guaranteed more than 12% profit at a time of 3% growth? When AEP needs to replace the transformers controlling power, why is AEP’s first move is to go to collect from Ohio rate payers? Call the arrangement a bailout, or corporate welfare. Both describe, more or less, the favors performed by the Public Utilities Commission of Ohio for AEP. Recently, PUCO approved a $255 “capacity charge,” roughly 1.6 cents per kilowatt-hour applied when customers switch to a competitor, generating revenue the utility deems essential to its operation. Why can’t AEP compete?
AEP threatens job losses and reduced investment if the money does not flow. As a result, the new fees work as a barrier, diminishing the likelihood of switching, allowing the utility to hold customers and revenue. AEP insists that it needs the money, that it requires a transition to a competitive marketplace. AEP doesn’t appear to be in the dire financial condition – in 2009, AEP’s Columbus Southern Power met the commission threshold for excessive earnings. Between 2008 and 2010, AEP spent $28.8 million lobbying and received a tax rebate of $545 million while it made $5.899 billion in US profits, paying a tax rate of negative 9%.
Proposed plant shutdowns AEP announced in June 2011 blamed the Environmental Protection Agency and said layoffs of 600 workers would result. The claim was that the federal government would force the retirement of 60 gigawatts of coal-fired power. These units are on average, 55 years old have long been slated for retirement, partly to comply with a 2007 settlement with the Bush administration. Some are unprofitably running at 5%capacity. Aren’t these the services “these incompetent and monopolistic” corporations were supposed to provide?
In America today, the biggest recipients of handouts are not poor people. They’re corporations. Unfortunately, too many people think “free market” means pro-business. It doesn’t. Free market means laissez-faire — prohibit force and fraud, but otherwise leave the marketplace alone. No subsidies, no privileges, no arbitrary regulations. Competition is the most effective regulator. Anyone not knowing this is merely showing their appalling lack of knowledge of finances and operations in big corporations.
Acknowledge the existence of this influence and allocation of resources. Notice the enormous discrepancies in “end welfare as we know it” meaning welfare programs for the poor and less fortunate as the problem with the US debt and deficit with no such agenda for corporate welfare recipients. Many companies are double, triple and quadruple-dippers into the taxpayer pig trough. And there are no time limits— they go on forever, unlike most social welfare programs. Welfare laws deny benefits even to legal immigrants in this country; corporate welfare is non-discriminating subsidizing foreign corporations as well as domestic. Tax loopholes enable foreign multinationals doing business in the US to pay proportionally less than their U.S. counterparts.
The New York Times reported that several companies who claim they will collectively loose more than a billion dollars due to Obamacare want to repeal a provision that affects them. Upsetting these pigs is they are losing a corporate subsidy. To clarify, these companies are receiving free taxpayer money due to the Bush prescription drug program and no taxes were imposed. But under the new healthcare law, they will still get the free money but will be required to pay taxes on it. Boo Hoo, poor corporations!
I guess its job creation! Corporations pay out to an estimated 11,000 organizations and agencies that work on getting this money out of taxpayers; because “these welfare payments come in every conceivable shape and size, including government grants, contracts, cut-rate insurance, loans, and loan guarantees. There are roughly 125 such business subsidy programs in the federal budget and they can be found in virtually every cabinet agency of the government–including the Defense Department”.
The $3 trillion plus bailout of the financial industry can most certainly be termed as corporate welfare, but call that saving the “economy” and focus on the hundreds of billions of dollars given away each year to these corporations with no end in sight. Scream about the dangers of the corporate welfare state. Republicans, corporate welfare savings could eliminate Capital Gains Tax, or the Death Tax, or cut the Corporate Tax or all Personal Income Tax Rates by 10%. Democrats, it’s more than enough to fund the Pension Benefit Guaranty Corporation, an agency of the federal government “to prevent the ‘great personal tragedy’ suffered by employees whose vested benefits are not paid when pension plans are terminated and not paid when corporate pension plans fail. The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets and is responsible for the pensions of about 1.3 million people. Oops more corporate welfare.
“ With one in five children in deep poverty, one might expect that a public effort to curtail welfare would focus on cutting big handouts to rich corporations, not small supports for poor individuals. But somehow the need for stand-on-your-own-two-feet responsibility does not apply to large corporations.”