Compassion as a Marketing Tool
Corporations do everything they can to pay less tax and keep wages low while promoting an image of responsible citizenship. Taco Bell has its Tacos and Tunes program to fight hunger. “Tacos and tunes continue to make a dynamic duo – and are now teaming up to make a difference – as Taco Bell ‘Feed the Beat’ artists are helping to raise awareness and donations to end world hunger.”
Walmart has its own hunger program and many corporations have signed on to the World Food Program while Feeding America and the Food Research Action Center get funding from Walmart and Bank of America among others. Perhaps Taco Bell and Walmart could put more money into the hands of their workers and pay more in taxes to help the cause of hunger. By promoting anti-hunger programs, they get positive public relations, but they also get a tax write-off for their generosity.
In 2011, the Target Corporation received a Hunger Hero award from hunger relief organization Second Heartland Harvest. While it’s wonderful that Target (along with General Mills and others) received an award for helping the hungry in the U.S., how many more people could they help if they paid employees more or paid a slightly higher rate in taxes? However, the PR from such an award is priceless.
While Walmart supports hunger programs, many of its workers qualify for food stamps. In fact, taxpayers are subsidizing Walmart workers who qualify for food stamps due to low wages to the tune of billions of dollars every year.
Cuts to Food Programs
Recent cuts to food programs by Congress and the White House have led to a 40% cut to funding for food banks and soup kitchens nationwide. So while corporations are signing on with hunger prevention organizations or running their own anti-hunger campaigns, federal cuts are being made to the SNAP (Supplemental Nutrition Assistance Program) program, formerly called “food stamps”. The House Agriculture Committee voted on April 18th to drastically cut the SNAP funding by over $33 Billion dollars. An economic crisis is the worst time to cut programs to help the needy.
The new Ryan budget plans a $134 billion cut to the program over ten years. One reason cuts for food programs are needed is that the effective tax rates of corporations are historically low. There’s just no money for food programs and conservatives are unwilling to close tax loopholes or return to pre-Bush tax rates to help fund programs for the needy.
Moreover, these corporations fight the economic changes that would be required to end poverty, the cause of hunger. Lisa Hamler Fugitt, Executive Director of the Ohio Association of Second Harvest Food Banks (OASHFB) tells us that, “hunger is directly related to poverty, and to end hunger requires policies that increase employment and wages and modest increases in federal nutrition programs.” However, OASHFB is one of a few food banks that advocate changes in policies that lead to poverty. Less than one in ten food banks advocate anti-poverty programs and programs promoting higher wages and better jobs is counter to the mission of corporations that sign on to many high profile anti-hunger programs. Of the roughly 200 food banks in the Feeding America network, more than half don’t advocate at all, not even to support the renewal of the SNAP (food stamp) program.
Lobbying Against Taxes
Corporations spend millions of dollars lobbying to have loopholes put into the tax code each year so they can pay a low effective tax rate. Historically, rates have been much higher than they are today. So while food stocks and funding for food programs is dropping, the effective tax U.S. corporations pay is much lower than most industrial nations. This is how GE paid effectively no taxes in 2010.
In fact, thirty large U.S. companies paid no taxes from 2008-2010. And most foreign companies pay no taxes on their U.S. operations at all. “The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.” However, by lobbying and paying for Congressional campaigns, “280 profitable Fortune 500 companies collectively received $223 billion in tax breaks between 2008 and 2010 while contributing $216 million to Congressional candidates over the last four election cycles.”
That $223 billion in tax breaks received could pay for a lot of food stamps. But when you can spend millions in lobbying, you get results.
In the end, multinational corporations pay a lower rate than most individuals do, here and abroad, “…U.S. multinational corporations enjoy an effective tax rate of just 2.4 percent on billions of dollars in foreign active earnings.”
So while Taco Bell, Walmart and other corporations get good publicity for their anti-hunger programs, they fight real long term solutions for hunger.