SHORT TAKES #11: CORPORATIONS AND THE FEDERAL GOVERNMENT
Here are short takes on three important stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information. These three highlight the relationships between corporations and the federal government.
STORY #1: In 2023, $2,974 of the average taxpayer’s federal taxes went to the Defense Department. Of that amount, $705 went to salaries for the troops, while 2 ½ times that, over $1,700, went to for-profit corporate defense contractors. Among others, $87 went to Boeing, whose V-22 Osprey military aircraft has crashed multiple times, most recently last November, killing eight service members. The $2,974 to Defense is more than two months of rent for the average renter with well over a month’s rent going to defense contractors. Another $112 from the average taxpayer went to support for foreign militaries.
For the sake of comparison, the federal government spent, from the average taxpayer, $516 for food assistance for low-income Americans, $346 for K-12 education, $110 for the Child Tax Credit which lifts poor children out of poverty, and $58 for diplomacy. These data come from the Institute for Policy Studies’ annual receipt for the American taxpayer.
STORY #2: To penalize the greed of large corporations that have made record profits by increasing prices, the Ending Corporate Greed Act has been introduced in Congress. It would put a 95% tax on the profits of large corporations (over $500 million in yearly revenue) that exceed their average profits in 2015 – 2019. The goal is to heavily tax the windfall profits large corporations have made in the pandemic and post-pandemic years by hiking prices on gas, food, rent, drugs, and other products. Large corporations have used the smoke screen of supply chain problems and other effects of the pandemic to create price “inflation” that did not reflect increased costs but was simply greed, using a catastrophe as a pretext for raising prices and profits. [1]
In 2023, corporate profits rose to record highs due to price gouging. If the 95% windfall profits tax had been in place in 2023, just ten large corporations would have had to pay $300 billion on their excess profits. For example, Amazon’s profits were $37.6 billion, a 444% increase from its average profits from 2015 to 2019. It would have paid $19 billion if a 95% windfall profits tax had been in place. Other notable increases in profits occurred at Marathon Petroleum (up 325%), Chevron (up 289%), Exxon Mobil (up 165%), Google (up 195%), and Microsoft (up 190%).
STORY #3: Large chemical corporations, such as ones that produce pesticides, routinely work to influence the Environmental Protection Agency (EPA). For example, the EPA recently proposed easing restrictions on the pesticide, acephate. The European Union banned this pesticide over 20 years ago. It’s a type of chemical called an organophosphate. These chemicals are linked to detrimental effects on children’s brains including autism, hyperactivity, and poorer cognitive performance. [2]
Several studies suggest that even at currently allowable levels acephate may be causing learning disabilities in children exposed to it while in utero or during their first years of life. In 2017, researchers found that children of Californians who, while pregnant, lived within 1 kilometer of where the pesticide was applied had lower IQ scores and worse verbal comprehension on average than children of people who lived further away. Two years later, another group of scientists reported that mothers who lived near areas where acephate was used during their pregnancies had children who were at increased risk for autism.
In 2021, the EPA effectively banned another organophosphate pesticide, chlorpyrifos, based in part on evidence linking it to detrimental effects on children’s brains. (Based on a lawsuit by a company that sells chlorpyrifos and several agricultural groups, a court blocked the ban. This allows the use of chlorpyrifos on some crops, including cherries, strawberries, and wheat.) While some health and farmworker groups are petitioning the EPA to ban all organophosphate pesticides, the EPA is arguing that it can adequately protect children by limiting the amounts farmers can use.
The U.S. regulation of pesticides (and other chemicals) is weaker than in other well-off countries because it’s particularly vulnerable to industry influence in multiple ways. The chemical corporations are responsible for paying for research to establish the safety of their chemicals (because the U.S. government doesn’t want to pay for the testing itself). This, of course, creates huge conflicts of interest. There’s a lot of evidence that the testing research is biased in favor of the corporations and the (supposed) safety of their chemicals.
Furthermore, the corporations are pushing the EPA to allow a new type of toxicity testing that is quicker and cheaper. Rather than relying on the traditional animal testing, the industry wants to do testing just on disembodied cells. This type of testing is not as sensitive and, therefore, tends to find more chemicals and higher levels of chemicals to be safe. Scientists have warned the EPA not to use these new tests to loosen regulations.
In addition to doing the testing, the corporations also work to influence the EPA through lobbying, campaign contributions to elected officials, and the revolving door for personnel. People move back and forth between the chemical corporations and the EPA division that regulates them. If an EPA employee wants to get a job with a chemical corporation when they leave the EPA, they have an incentive to act in ways that don’t alienate prospective future employers.
The EPA’s Office of Pesticide Programs has been criticized for allowing pesticides to be sold without required toxicity testing. In 2018, staff members celebrated having waived 1,000 legally required tests for pesticides! It was noted that this had saved the chemical corporations more than $6 million.
[1] Johnson, J., 6/21/24, “Bowman, Sanders propose 95% tax on corporations exploiting inflation to jack up prices,” Common Dreams (https://www.commondreams.org/news/windfall-tax-inflation)
[2] Lerner, S., 4/24/24, “10 times as much of this toxic pesticide could end up on your tomatoes and celery under a new EPA proposal,” ProPublica (https://www.propublica.org/article/epa-acephate-pesticide-adhd-autism-regulations)