Make the rich pay their fair share - it's a common rallying cry among progressives, and the current administration hasn't hesitated to use it. Despite the evidence suggesting the wealthy pay far more than that already, President Joe Biden has continued to target corporations and the affluent with a broad array of tax hikes and new levies. The press might market the White House as a thorn in the side of Wall Street. The reality, however, is that Bidenomics might be the “goodest” friend Corporate America has ever had.
Joe Biden and Big Auto
The White House recently announced that it is awarding nearly $2 billion in grants to retrofit and retool 11 at-risk auto manufacturing plants in eight states and convert these facilities into electric vehicle hubs. The federal funding will be given to some of the largest automotive companies in the world, including Fiat-Chrysler ($584 million), General Motors ($500 million), Harley Davidson ($89 million), and Volvo ($208 million). Administration officials say this program will save 15,000 jobs and create approximately 3,000 new ones.
The money comes with strings attached, complementing President Joe Biden's $177 billion spending spree on EV and battery manufacturing. According to the White House, recipients must commit to various milestones, establish a production schedule, and provide workforce training.
Energy Secretary Jennifer Granholm asserted that the grants are critical to ensure the US automotive industry can compete in a global marketplace. “There is nothing harder to a manufacturing community than to lose jobs to foreign competition and a changing industry,” she said. “Even as our competitors invest heavily in electric vehicles, these grants ensure that our automotive industry stays competitive - and does it in the communities and with the workforce that have supported the auto industry for generations.”
In other words, domestic and foreign corporations can depend on subsidies, loans, and tax breaks from Uncle Sam to stay afloat.
Corporate America Sips a Cup of Joe
President Biden and his fellow Democrats have long demanded that wealthy individuals and corporations pay their fair share. However, conservative economists and Republican lawmakers accuse the incumbent of engaging in a good old case of hypocrisy, alluding to what they say is nothing more than corporate welfare.
The green energy sector, such as solar providers and windmill builders, has feasted on government support. It seems like every other month, the White House announces a fresh round of taxpayer dollars for the next big scheme to prop up heavily subsidized products consumers do not want or regret purchasing in the first place.
As Democrats contend that the Trump-era tax cuts stopped revenues from coming in, which is a false allegation, Cato Institute tax expert Adam Michael estimated that green energy handouts would drain the Treasury of nearly $2 trillion over the next decade. What does the US have to show for this so-called investment? Not much. Most of America's energy needs are still satisfied by crude oil, natural gas, coal, and nuclear. Solar and wind? A combined 14%.
"He has given huge tax breaks and spending subsidies to Big Semiconductor, Big Wind, Big Solar, Big Battery, Big Automaker, Big Utility, and so on," wrote Chris Edwards, an economist at the Cato Institute. "Rather than trickle-down economics, this is a Niagara Falls of subsidies flooding from Washington to the president’s favored industries and corporations."
In an April report, GOP members of the House Budget Committee pointed to the president’s landmark legislative pursuits that extended hundreds of billions of dollars in federal subsidies and narrow tax breaks to U.S. and foreign companies. "The tax code should not be used to pick winners and losers," the House Budget Committee stated in the report. "It should be used to provide the minimum level of revenues necessary for the government’s constitutional responsibilities in the least economically distorting way."
All of the president’s men and women have not shied away from these accusations. Doling out hundreds of billions of dollars in taxpayer money to Big [Insert Here] is a mantra of Bidenomics. In August 2023, administration economists explained in a paper that accelerating public investment will "catalyze additional private sector investment" and ensure that critical sectors not receiving sufficient investments will satisfy US economic objectives and protect national security interests.
"Significant public and private investments are needed to support the creation of durable, thriving domestic semiconductor and clean energy industries that meet our climate and national security goals, including in developing and building new infrastructure," wrote White House economist Heather Boushey. "Bidenomics makes targeted public investments in industries like semiconductors and clean energy that are critical for U.S. economic and national security," the paper adds. "However, successfully building these industries in the United States requires both public and private investment."
If anyone requires an example of Keynesian economics, this paper can be entered into evidence.
Titans Leaning on Taxpayers
Some of the newest recipients of the nearly $2 billion in funding possess a total market cap of about $144 billion. Why would billion-dollar brands require support from cash-strapped taxpayers and a federal government that is facing a $35 trillion national debt, $2 trillion budget deficit, and $1 trillion interest payments? On the one hand, corporations need to pay their fair share. On the other hand, corporations require a crutch – courtesy of the American people.
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