Corporate Welfare and Your Tax Bill

The Other 98% Tax breakdown meme

The Other 98% Tax breakdown memeCourtesy of The Other 98%, with over 59,000 likes and 167,000 shares. This meme shows an invoice of sorts, breaking down a hypothetical tax bill. It shows how much is paid to fund various social and environmental programs vs. “the war machine” and “corporate welfare”. How does this match up with reality?

Tackling the Numbers

As with most memes from The Other 98%, there is no source given, so checking the numbers involves digging into the federal budget on our own. Many items on this list are not specific, so it’s impossible to determine exactly what they are referring to. For example, what does “I am for entrepreneurship and innovation” mean? Subsidies to small businesses, the Commerce Department, research funding, education funding? All of the above? It’s not clear. Therefore, it’s not possible to fact check most of these numbers.

However, the first two items on the list do seem to be fairly specific.  We can assume “I want my PBS” refers to the federal funding for the Corporation for Public Broadcasting, and “I am all for federal funding of art programs” refers to the National Endowment for the Arts.

Since PBS funding is roughly 3 times the NEA funding, both in the meme and the federal budget, it seems safe to assume that we’ve found the correct baseline to check this meme. Additionally, if we take $445 million and divide it by 324 million (the current US population) that gives us $1.37, exactly the amount in the meme. Let’s leave aside the fact that nowhere near 324 million people pay taxes, for now.

Extrapolating Defense Spending

Assuming the meme’s reference to “the war machine” implies military spending, how much would this meme’s taxpayer pay?

  • According to the Department of Defense, their requested 2017 budget is $582 billion.
  •  Divided among 324 million people comes out to $1,796 per person

$1,796, not $575, is the actual amount this taxpayer would be contributing to military spending. Ironically, this meme understates their case, quite substantially.

Corporate Welfare

This meme claims that $368 is their share for corporate welfare to Wal-Mart and Big Oil. That means we’re looking for an amount 268 times as large as PBS funding, or over $119 billion in annual government spending. Do Wal-Mart and Big Oil really get $119.5 billion in subsidies every year?

There are many examples of welfare for businesses. For example, the federal government spends $20 billion annually on farm subsidies, which would be $61.72 for this meme’s hypothetical taxpayer. But they’re not talking about farm subsidies, only “Big Oil and Wal-Mart”. How much do they get?

Data for individual corporate subsidies is difficult to come by, but the organization Good Jobs First (no friend of big business) compiles such a list. They’ve done the exhausting task of matching 164,000 federal subsidy awards with their parent company and put it into their “subsidy tracker”. The list of companies with over $500 million in subsidies since 2000 is shown to the right.

The top recipient of federal subsidies is Iberdrola, a Spanish renewable energy company. The second largest recipient of corporate subsidies, NextEra is also a renewable energy company. A good chunk of all corporate subsidies go to renewable energy, but since this meme wants “more to be done for climate change”, they will be ignored.

It’s hard to say exactly what welfare for “big oil” is, as companies involved with fossil fuels are often also involved with renewables. Indeed, many “big oil” companies were given subsidies to develop renewable sources, so it’s hard to separate the two. Giving the meme the biggest benefit of the doubt, we’ll label any energy company involved with fossil fuels “big oil”.

Out of the top 100 recipients of corporate subsidies (Appendix B), 30 could be considered “big oil”. Their total:

  • Big Oil- $14.9 billion in federal subsidies (since 2000)
  • Wal-Mart $0 in federal subsidies
  • Combined- $50 per hypothetical taxpayer

Yes, Wal-Mart has received $0 in federal subsidies (grants and allocated tax credits), according to their subsidy tracker since 2000. Why then, do some outlets claim they get billions in subsidies every year? Because they count government assistance, like food stamps, as a subsidy if their employees receive them. This is a fallacious economic argument, previously covered here, and examined elsewhere here. Underlying this view is the belief that companies are able to pay people less because of welfare. In reality, the opposite is true, it actually makes it less lucrative for people to take low paying jobs. Welfare programs are subsidies given to individuals, not companies. Not only would it be “double counting” to consider it corporate welfare, it’s disingenuous. Whenever attempts to cut food stamps are considered, no one ever points out how it will hurt Wal-Mart, only that it will hurt low-income families.

State and Local Subsidies

corporate subsidies from state and local governments

Top 100 corporate subsidies from state and local governments.

While Wal-Mart receives no direct federal subsidies, they do receive some from state and local governments. According to the subsidy tracker, $181 million was doled out for Wal-Mart. This would be 56 cents for our hypothetical taxpayer in the meme, slightly more than federal arts funding.

What about big oil? If we look at the state and local government subsidy report (shown to the left) we find a total of $6.2 billion in additional subsidies for “big oil” (lumping any energy company with fossil fuel involvement under this name).

Worth noting is many of the top corporate subsidy recipients are involved in manufacturing in America. Boeing, Alcoa, GM and Ford receive far more than all of “big oil” combined. Since the meme claims to want “more American manufacturing”, they’d presumably support this. However, it would cost more than the $.43 the meme claims. Just these companies alone totaled $24.8 billion in subsidies, or $76.62 per American (note: this doesn’t include the auto bailouts under TARP).

Totaling Corporate Subsidies

Adding federal, state and local together we get these totals:

  • Big Oil- $21.1 billion
  • Wal-Mart $181 million
  • Combined- $21.3 billion
  • $65.74 per hypothetical taxpayer

The meme claims $368 is paid to these subsidies, over 5 times the actual amount.

Additional Context

Keep in mind that these $21.3 billion in subsidies are a total since the year 2000. They are not yearly expenditures, which means the annual amount is far less, probably $10 or less per taxpayer.

This meme only gives a sliver of the federal programs. It doesn’t sound like much to say supporting PBS costs $1.37, but when there are hundreds of different programs and agencies those numbers add up. The greatest federal expenditures are for social security and healthcare programs, primarily Medicare and Medicaid. These programs combined totaled $1.83 trillion last year. This would equal $5,648 for the taxpayer in the meme, dwarfing everything else on the list put together.

The meme’s dollar amounts are taken considering the entire US population of 324 million pays equally, which is not the case. With over 94 million of the population out of the labor force, and another 74 million under 18, all of these contributions can be doubled at a minimum. For those earning a good living, multiply it by even more.


This meme is a mixed bag. On one hand, it far underestimates the amount of defense spending. On the other, it far overestimates corporate subsidies for Wal-Mart and “big oil”. It’s also unrealistic in assessing the share of expenses, as taxes are paid highly unequally, and only by part of the population. Still, assuming one’s share of PBS funding is $1.37, that would equal:

  • $1,796 in funding the “war machine (meme’s claim was $575)
  • Less than $10 for Wal-Mart and Big oil (meme’s claim was $368)

To get a good perspective of government spending see the chart below. The reality is that Social Security, Medicare/Medicaid and defense spending make up the vast majority of the budget, with everything else (including PBS, arts and corporate welfare) a small footnote.

Total federal spending

4 Comments on "Corporate Welfare and Your Tax Bill"

  1. you mention PBS. Why? their news is so slanted I don’t think they should get a red cent. if that changed great. as far as the rest of the distribution I could debate any money spent on global warming when 31,487 US scientists agree it’s a hoax. Google it! the polar bear population has increased 44 % in the last 11 years. Gore made millions on this fiasco. Obama gave billions to countries all over the world that hate us then apologized for us. I am sure how we spend this money needs revamping but it looks promising in the future.

    • Not endorsing PBS getting federal funds, just analyzing how much relative to other programs.

    • Idiot Police | March 23, 2017 at 2:21 pm |

      You are an idiot. This site is neutrally validating the claims in the meme, not advocating for PBS, global warming, abortion, medicare or really anything at all.

  2. Would love to see this broken out by tax bracket or income level, with actual dollars spent by the US government…
    Good info.

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