Cutting corporate tax loopholes is not food for kids

Eliminating food aid for up to six million people would also be hard to square with the House’s refusal to address corporate tax dodging. Huge multinational firms use loopholes to avoid taxes that altogether dwarf the proposed $40 billion cut to the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps).  The combination of cutting SNAP while failing to snap closed special tax breaks for corporations and the wealthy shows that the values of House Republicans are disturbingly out of step with the American people.

SNAP is one of the nation’s most effective anti-poverty programs, staving off hunger for 47 million Americans of every age, from infants to seniors. Hardworking parents and disabled veterans alike benefit from SNAP. In the Great Recession and the slow recovery that’s followed, millions of middle-class households have come to rely on SNAP to ensure there’s always enough to eat.

{mosads}Spending on nutritional assistance is also one of the best ways to stimulate a sluggish economy: because the money is immediately spent locally. Every dollar of benefits results in $1.73 worth of economic activity, according to the economic research firm Moody’s.

SNAP is efficient, with 95 percent of the budget going directly to the purchase of food for American families. Studies have shown that children who grew up in households that needed nutritional assistance and had access to SNAP were healthier and did better in school  than those from families that had to worry about where the next meal was coming from. 

The vast majority of adult SNAP participants who are not disabled or elderly work. Despite the weak economy, more than 80 percent of working-age SNAP recipients have a job while, just before or soon after receiving benefits.

None of this seems to matter to House Republicans. Nor do they seem to reflect on the cruel irony of cutting food aid for children while keeping in place huge tax giveaways for corporations and the wealthy that cost our country hundreds of billions of dollars every year.

One good example is the loophole that allows multinational corporations to indefinitely delay American taxation on profits they make overseas—or claim to make overseas, since it’s easy for a big corporation to manipulate sources of income.  It’s estimated that American corporations have almost $2 trillion stashed overseas; household names like Apple and Microsoft have tens of billions of dollars each parked offshore.  

Ending this open invitation to hide profits and ship jobs overseas would raise almost $600 billion over the next decade, according to the Joint Committee on Taxation—15 times the value of the proposed SNAP cuts.

Corporate tax dodging goes beyond offshore tax havens. Familiar corporate giants like General Electric, Wells Fargo, and Verizon go years without paying any federal income tax, despite billions of dollars in profits, according to the non-partisan think tank Citizens for Tax Justice.  Big, profitable corporations pay on average just one-third the official corporate tax rate, the Government Accountability Office has found.  And corporate tax receipts as a portion of total federal income is at a 60-year low, the Office of Management and Budget reports.

Members of the House face a profound moral question this week. Will they vote to cut food aid for children, seniors, veterans and the disabled, in the midst of widespread and prolonged unemployment, poverty and economic inequality?

Or will they instead finally turn their attention to the scandal of corporate tax dodging, which destabilizes our public finances, impoverishes our national investments and exacerbates wealth and income gaps? We’ll all sleep better if they make the right choice—including millions of children who won’t go to bed hungry.

Weinstein is executive director of the Coalition on Human Needs.


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