Capitalism: Wealthy are More Dependent on Government

Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth. ~ Marcus Aurelius

MUNCIE, Indiana (NEWS) – Capitalism is under fire in this country and around the globe. There are many comments and opinions about self-sufficiency, dependence, and who is responsible for the creation of wealth. One of the mantras of the conservative base is accusing the liberals of being a tax and spend philosophy. You can hear them toss about statements like, “President Obama appeals to the food stamp base.”

Some even quote biblical fables about “teaching the man to fish instead of giving the man a fish”. Tales of government dependence and the “nanny-state” are tossed around on social network sites and talk radio programs with listeners picking up the chants – “Get a job…I’m tired of paying taxes so you people can sit at home and watch cable.”

While it is true that those who have no where else to turn for their next meal, or to pay for shelter, or provide for their family, will have to look to the government for support – let’s look at the whole picture. The negative characteristics of capitalism isn’t simply about the poor it leaves behind in the dust – let’s also view how the rich and powerful also rely on the government. Don’t they need the government, too?

As independent as they claim to be, the facts would show they are even more dependent.

We came across an article by Paul Buchheit, a faculty member of DePaul University and Chicago City Colleges, where he introduces perspective to this national discussion. Let’s take a look at what he discovered on how the rich rely on the government, and how much it costs taxpayers:


  • The government will spend $55 billion on Homeland Security next year, in addition to $673 billion for the military.
  • The police, emergency services, and National Guard are trained to focus on crimes against wealth.

Laws and Deregulation

  • The wealthiest Americans benefit from tax laws, property rights, zoning rules, patent and copyright provisions, trade pacts, antitrust legislation, and contract regulations.
  • Tax loopholes allow them to store over $1 trillion in assets overseas.
  • Corporations benefit from the SBA and SEC guidelines favoring business.
  • The FDA and USDA minimizes consumer complaints and product recalls.
  • Financial industry executives have profited from 30 years of deregulation – most notably the repeal of the Glass-Steagall Act.
  • Lobbying by the financial industry has prolonged the absurdity of a zero sales tax on financial transactions. Multinational corporations benefit from trade agreements like NAFTA, with international disputes resolved by the business-friendly World Bank, International Monetary Fund, and World Trade Organization.
  • Federal judicial law protects our biggest companies from foreign infringement.
  • The proposed Trans-Pacific Partnership would put governments around the world at the mercy of corporate decision-makers.
  • The euphemistically named JOBS Act further empowers business, exempting startups from regulatory accounting requirements.
  • There are even anti-antitrust measures, such as the licensing rules that allow the American Medical Association (AMA) to restrict the number of doctors in the U.S., thereby keeping doctor salaries artificially high.

Research and infrastructure

  • A publicly supported infrastructure allows the richest 10% to manipulate their 80% of the stock market.
  • CEO’s rely on roads, seaports and airports to ship their products.
  • The FAA and TSA and Coast Guard and Department of Transportation to safeguard them.
  • A nationwide energy grid to power their factories, communications towers and satellites to conduct online business.
  • Private jets use 16 percent of air traffic control resources while paying only 3% of the bill.
  • One of the most extensive advantages to the wealthy is basic research conducted with government money.
  • Taxpayer-funded research at the Defense Advanced Research Projects Agency (the Internet) and the National Science Foundation (the Digital Library Initiative) has laid a half-century foundation for technological product development.
  • Companies like Apple, Google, Microsoft, Oracle and Cisco have profited since the 80’s from the fastest-growing product revolution in American history while the U.S. Government was providing half the research funds.
  • Even today 60% of university research is government-supported.
  • Public schools have helped to train the chemists, physicists, chip-designers, programmers, engineers, production line workers, market analysts, and testers who create modern technological devices.
  • Let’s not forget about the publicly funded fiber optic networks used to carry out derivative transactions.


  • Annually, $1.3 trillion in “tax expenditures” (tax subsidies from special deductions, exemptions, exclusions, credits, and loopholes) goes to the top quintile of taxpayers.
  • Mortgage interest and rental expense deductions alone returns almost $100 billion a year to millionaires.
  • The Federal Reserve provided more than $16 trillion in financial assistance to financial institutions and corporations.
  • According to Citizens for Tax Justice, 280 profitable Fortune 500 companies, which together paid only half of the maximum 35 percent corporate tax rate, received $223 billion in tax subsidies.
  • In agriculture, most of the funding for commodity programs goes to large agribusiness corporations such as Archer Daniels Midland.
  • For the oil industry, estimates of subsidy payments range from $10 to $50 billion per year.
  • According to the USDA, taxpayers cover about two-thirds of the premiums for crop insurance policies. The cost to taxpayers has grown from $1.5 billion a year in 2002 to $7.4 billion last year.
  • And guess who gets to bail out the farmers when crops are ruined due to the lack of rain?

That leads us to the last item on the list.

Disaster costs

  • Oil spills, crop failures, automotive and financial bailouts to mention a few.
  • The financial disaster, due to fraud and mismanagement by their grossly overpaid CEO’s, cost taxpayers $13-15 trillion, or enough to pay off the deficit and next years entitlement costs.

It appears the wealthy are much more dependent on government than our Washington politicians will admit, or at least address when they discuss entitlement reform.

It might be one reason we have witnessed “outrageous” campaign contributions by the wealthiest of our citizens. They have more invested in maintaining the status quo, and keeping programs clearly benefiting them, while focusing the narrative on entitlement reform for those who they think don’t deserve it, yet are reliant on government assistance for their survival.

It’s sad when we hear the propaganda from a large contingency of conservatives who blow up smoke screens disguising the real issues of who uses government – spending mega-millions on political campaigns is astronomical to those  living one check to the next, but when you have billions of dollars coming from taxpayers through the federal government into your corporations, or allow regulations to negatively impact your net income, it’s a small investment to make sure things go your way.

Don’t buy in to the propaganda – we can verify facts and figures real easy today with computers and smartphones. There is no excuse for ignorance.

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Todd Smekens

Journalist, consultant, publisher, and servant-leader with a passion for truth-seeking. Enjoy motorcycling, meditation, and spending quality time with my daughter and rescue hound. Spiritually-centered first and foremost. Lived in multiple states within the USA and frequent traveler to the mountains.

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One Comment

  1. Interesting itemization of the ways the wealthy and powerful benefit from government supplied or protected benefits. Good to have it all laid out in one place.

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