Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)

This book is by the author of the book, "Perfectly Legal," which I have also reviewed. Like its predecessor, this one will also get your blood boiling, assuming you are concerned about the super rich getting richer and richer via our current federal tax policies and other loopholes and give-a-ways.Like "Perfectly Legal," this one contains a good blend of stories, literary techniques, well-thought-out opinions and solid factoids. I highly recommend it.The thesis is that "the elites have captured the government and are milking it for their own benefit...." Put another way, when Ronald Reagan asked the American public if they were "better off now than you were four years ago," he was not really asking this of the middle class. No, he was asking this of the rich and powerful. And under his leadership, he began an extended period where "government has been to make the rich richer."Johnston says that "our founders did not create America to make us rich....Yet for more than a quarter of a century, we have acted as if economic gain is the great purpose of government....It is the rich who are gorging themselves on the government with giveaways, favors, contracts, rules that rig the economy, tax breaks and secret deals." And he has the details and stories to back this up.He starts with the story of the Brandon Dunes golf course on the southern coast of Oregon, how the developer bought the land on the cheap, then saw that state regulations were changed to allow his project. He then got a huge government subsidy to build an airport, primarily for corporate jets. Per the author, the project is a net loser for the American tax payer, who, essentially, pays for every round of golf played by the wealthiest Americans.For the vast amount of Americans, "annual income has been on a long, mostly downhill slide for more than three decades," per Johnston, who claims that despite overall gains in the economy, the bulk of the earnings went "straight to the top." Significant has been the growth of lobbyists in Washington, going from about 17,000 in 2000 to more than 35,000 in 2008. With this gang, per the author, it is all about free lunches.There is the story about CSX railroad cutting its budget for rail inspections. When an accident happens, a jury eventually awards a huge settlement to the victims. But CSX simply sends a bill to AMTRAK for reimbursement and is paid in full. And there is the story of the new Yankee Stadium, which involved the government seizing public parkland for this private enterprise. And the stories of the owners of sports teams and the way they seek subsidies and tax breaks, while the values of their enterprises rise. In most cases, they pay little or no rent on stadiums built and owned by the public. Says Johnston, "We starve libraries - and parks, bridge safety and schools - to enrich sports-team owners." Of course, this is how George W. Bush made his money.George Herbert Walker Bush was in the White House, when George W. put together a partnership to buy the Texas Rangers, which was a struggling team playing in an aging stadium. Bush borrowed $600,000 for a two-percent stake in the deal. What the team needed to prosper was a new stadium. Bush saw to it that land was seized by government and that the voters agreed to tax themselves to fund the building of a new ballpark. Nine years later, the team that was bought for $86 million was sold for $250 million. Based on his initial investment, George W. should have made about $2 million on the deal, but somehow he made about $17 million, which he reported as capital gains on his income taxes, not income from a bonus paid to him by the other owners. His tax statement was never audited. He was a wealthy man, thanks to the generosity of the Texas taxpayers.And then there are the big box stores, like Wal-Mart, that get breaks on property and sales taxes when they move into town. Essentially, the taxpayers are subsidizing the store, so that it can charge less for goods and put competitors out of business. Even Warren Buffet has a history of getting government handouts in subsidized projects for his GEICO Insurance call center locations. And, per the author, "Buffett is a master at delaying the payment of taxes."Johnston also has stories about Tyco and Enron. And he tells us the post-dating scandals for corporation stock options awarded to company officers. Another is that the Medicare Modernization Act of 2003 "was written in a way that looked out first for the interests of drug makers and health insurance companies...." And there are the hedge funds that bury much of their earning in off-shore banks and are experts at avoiding taxes, both for the companies and their officers."For the richest Americans, the years since 1980 have been very good," says Johnston. And his thesis is that those at the top have had government at their side all the way. One result is a health care system that costs much more than any other in the world, but with overall outcomes that are worse or no better. Another is a shrinking middle class that is certainly no better than it was 30 years ago."Free Lunch" is a compelling, informative read. I recommend it.

Book title: Free LunchAuthor: David Cay Johnston598 pages not including index and acknowledgementsNon fiction Some forms of corporate welfare have a name - subsidize. If Walmart decides to build a new store in your town it announces its intentions. Then the community is expected to give them prizes for choosing your town. Walmart gets the free land, the building, tax breaks and sales tax. I used to think that when I paid sales tax, the money went to the state, but in many cases, of sports teams and big stores, the money is kept by the corporation. So you and the mom and Pop store down the street that is being squeezed out by Walmart, get to pay Walmart's taxes and we give them gifts even if we don't shop there. Walmart is not the only corporation on the take. Many smaller stores like the hunting and fishing chain Cabela's also get the same perks. Even big cities where hunting residents have few opportunities to hunt or fish compete to give Cabela's subsidies. Does your town have a sports stadium? Then the owners get freebies. Again this includes free land, free buildings and tax breaks that probably include collecting the sales tax. George W. Bush in the years before he became governor of Texas was well- connected. He is is the grandson of a U.S. Senator and in those days he was the son of the president. He put together a deal to buy and then sell the the Texas Rangers. Bush made a profit of 16.9 million dollars. He and his partners bought the team, but tax payers bought land for the stadium built the stadium and Bush and his partners got the tax breaks including the right to collect and keep the sales tax. The public gets very little in return on these deals. Walmart and sports stadiums bring in only entry level and seasonal jobs. While these deals are negotiated usually behind closed doors, parks, libraries and schools get short changed. Funding for these programs gets cut. Health care in this country is another way in which the few get wealthier and most of us get poorer. Health care in the United States is a business and not a service. It is run for profit and the result is that we have the most expensive and least efficient health care system in the world. People with and without insurance go bankrupt when they can't pay hospital bills. While the Affordable Health Care Act nicknamed Obama Care is certainly imperfect. It is a step in the right direction. Insurance companies get rich collecting your premiums and then too often deny the needed care. We are often paying a company to deny our claim. One of the things I like about the book is the last chapter "What To Do." Too many books point out the faults, but don't give solutions. We must write letters to editors and congressmen. We must support with our money and more important give our time to groups that work for change. We must take part in chat rooms and online discussions like those here at Gather. Mark Twain once said that his job as a newspaper reporter was not to write about what was happening, but to get people mad enough to do something about it. Today as the rich get richer and the middle class gets poorer and the poorest Americans are condemned as lazy and not wort the welfare checks, we must decide how we are going to win our nation back. Do we send our tax money to those who already have too much like George Bush and Mitt Romney or do we insist that or money go to schools, parks, libraries and activities that benefit all Americans. It is time to cut out the welfare checks to the richest among us.

In this brilliantly-researched book, the New York Times' Pulitzer-Prize-winning tax correspondent David Cay Johnston explains how US politics serves to take from the many to enrich the few.He shows how, for example, President George W. Bush, Donald Trump, Paris Hilton, Steve Jobs and Warren Buffett have got rich by leeching off the taxpayer.Bush bought the Texas Rangers baseball team, with the help of a public subsidy of $202 million from the city sports authority to build a new stadium. Then he sold it nine years later, at a $164 million profit. Bush got $17 million, on which he paid tax at the capital gains rate of 20 per cent, not, as he should have done, at the compensation rate of 42.5 per cent, saving himself $3.7 million.Donald Trump benefits from a tax designed to help the old and poor, part of which is now diverted to fund his casinos. Paris Hilton's grandfather got his fortune by overturning his father's will, to take the money from charities that specifically benefited poor children. A fabricated Apple board meeting gained its CEO Steve Jobs an extra $70 million.Warren Buffett's MidAmerican Energy Company paid just 4 per cent of its US profits in federal corporate income taxes in 2006. The government agreed to let it defer $666 million in taxes in 2007, so by 2035 it will have paid just half of its tax! This is like getting an interest-free loan from the government, that is, from all other taxpayers.Many firms service the rich by helping them to evade taxes and cheat the great majority who pay their taxes. KPMG, for instance, helped Columbia/HCA cheat the government, when it had a contract to detect such frauds.The hugely rich get away with murder, yet a guy who steals nine videos worth $150 gets a 50-year jail sentence, with no chance of parole. The Supreme Court upheld this punishment in 2003. The rule of law, anyone?90 per cent of Americans are no better off than they were in 1973. Average incomes have fallen since then. Of every dollar earned in 2005, the richest ten per cent got 48.5 per cent. Between 1990 and 2003, the net effect of foreign investment in the USA was the destruction of 3.4 million US jobs.Johnston details rip-offs by student loan companies. "In a world of growing complexity and technological demands, short-changing higher education through rising tuition and high-cost loans is tantamount to a policy of reducing future economic growth so that the few today can have more. It is a kind of hidden tax on the future."He shows how the US healthcare system prioritises profits at the expense of care. Its administration costs were $123 billion in 2003: it is the world's most expensive health care system, and not the most efficient: the USA ranks only 36th in infant mortality.He analyses the infamous hedge funds and concludes, "Hedge funds are making a few people spectacularly rich, but they add nothing of value. Each trade that puts a dollar into the pockets of Simons and his investors is a dollar someone else lost. Trading is a zero-sum game."

All of us know or feel that the guys at the top or those with money use the system for their ends. Well, here's your American focussed rant of +300 pages which will inflame you and repell. Well documented and argued but only for America.

After reading this book I feel I have a better understanding of the meaning of CORPORATE WELFARE, and the unholy alliance between Big Corporations an corrupt politicians in the US. It seems they both are so corrupt and interconnected, with very rare exceptions. One guy is making the law today, and the next day he is the CEO of a corporation that gets benefits (tax cuts, subsidies, deregulation) from the law. I just wonder how much of that is happening in Canada? I bet it is happening, but no one is saying anything, why?

Large American companies have taken over in Washington. Each chapter explains in detail how the rules have been rigged to benefit big companies at the expense of the ordinary citizen. The Fortune 500 are all now Corporate Welfare Bums!!

Arrived in good condition