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Meme Killer #8: Personal Trainer Addition



It’s no secret that we here at Meme Killer take great delight in debunking the farrago of Internet nonsense that is continuously regurgitated by dim-witted consumers of right-wing media outlets. But fighting back against inaccurate online information means being fair, and it means debunking crap whether the crap seeks to serve a progressive agenda or a reactionary one.

In fact, if you identify as a progressive/liberal/lefty/whatever, you should be even more invested in stamping out bad information from your side of the aisle—because arguments based on bad information are more easily defeated. Killing liberal memes strengthens the liberal cause—let’s call this Meme Killer: The personal trainer edition.

This one comes via “BitchyPundit,” and puts some numbers on a claim often associated with left-wing populism (although you find the occasional honest libertarian railing about this, too):

“The U.S. government channels money from average Americans to large, profitable corporations.”

The claim supports itself by approximating the tax bill of said average American ($50,000 is close to the median income in this country), then figuring out what percentage of it goes to various bits of the Federal budget. All straightforward and easily checkable stuff. And to the meme-generator’s credit, they cite their sources. Unless you’re concerned that whitehouse.gov is an unreliable source because jihadist taqiya government lies, www.whitehouse.gov/2012-taxreceipt is a great way to check out how your government spends your tax dollars. It’s not totally clear what numbers BitchyPundit used to get the results they did—as we’ve discussed on Meme Killer before, how much someone making $50,000 actually pays in taxes depends on a bunch of factors. But putting $1,000 dollars in the “Income” box—totally reasonable—will get you pretty close results.

Except for that last item–$4,000 in corporate subsidies.

And therein hangs the tale.

Since that extremely large sum of money—which, it should be noted, is four times more than the total amount that an average American pays in taxes–is the whole point of the meme, we need to take a closer look.

Before we go on, let’s have a quick terminology lesson: “accounting cost” is what you actually pay—real money going back and forth. You pay $50,000 for that bronze statue of the Fourth Doctor you always wanted; $50,000 is the accounting cost. “Opportunity cost” represents all the stuff you couldn’t buy because you spent the $50,000 on giant metal Tom Baker. For example, you could have invested it in a money-market account that gains 3% APR compounded monthly; over the course of a decade your opportunity cost is about $67,000 (http://www.calculator.net/interest-calculator.html) . Or, you could have spent it all on buying up loads of Powerball tickets, one of which was a winner, and your opportunity cost would be in the millions. As you can see, opportunity cost is a highly speculative construct that you can’t really calculate precisely.

So it turns out, in between the second-to-last line-item in the meme and the last, invisible and unannounced (and therefore dishonestly), there is a major shift in what figures are calculated, and how they are calculated. Everything but the last is calculated using that Whitehouse.gov calculator and are accounting costs—x dollars come in via tax receipts, and y percentage of it goes to fund various parts of the Federal government.

The $4,000 figure comes from the second source cited: an article on CommonDreams.org (which uses $6,000; BitchyPundit adjusted the numbers a bit for unclear reasons; so everything that follows has to be multiplied by 2/3rds).

This article isn’t wrong, exactly—but it is not about how tax dollars are spent.

Claim #1: $870 for Direct Subsidies and Grants to Companies

Let’s start with the $580 (remember, we’re multiplying everything by two-thirds) in “direct corporate subsidies.” That’s the closest this article comes to talking about account costs: the Federal government actually transferring money to large corporations. This includes farm subsidies—many of which do go to large corporations, but some go to what can reasonably be described as “small family farms”–as well as “research funds to high-tech companies.” But many of those companies are doing research and development for the U.S. military—so it’s already accounted for in the $247.75 the average American is spending on national defense. Fossil fuel subsidies—usually, and maybe rightly, cited as the most egregious example of corporate welfare—are about 10% of total subsidies—so 58 bucks.

Claim #2 ($696 for Business Incentives at the State, County, and City Levels) counts state and local subsidies to private enterprise. Not part of your federal tax dollars. Dismissed.

This brings to claims #3 and 4, assuming “$722 for Interest Rate Subsidies for Banks and $350 for Retirement Fund Bank Fees.

Here, we get into the unpleasant and complicated world of high finance, but the basic idea is this: Banks make loans using money from their depositors (this is, like, the definition of a bank). Because banks think they can be bailed out if they’re really big (our friend the “Too Big To Fail” concept), they have an incentive to borrow more than they would if they didn’t expect a bailout. This is costly to the customers of these banks, among other ways through the bank fees mentioned in Item 4. This is a fine example of the well-known phenomenon of “moral hazard,” and you can make a convincing case that it’s a horrible system. But the U.S. government doesn’t actually bail out banks on an annual basis; the last time it happened was during the 2008-2009 financial crisis. So this has nothing to do with how tax dollars are spent.

Claim #5 is about prescription drugs: “$1,268 for Overpriced Medications.” Prescription drugs, because they’re sold for profit, are patented; only the company that designed the drug can manufacture and sell it. (Just like you can’t sell copies of someone else’s photographs). Since the government grants patents (and has since 1789), and prescription drugs would probably cost less in the short term if they weren’t patented, the claim is that the government is making you pay more than you should for prescription drugs. Maybe so, but this has nothing to do with tax receipts.

As a nice change of pace, claims 6 and 7 have to do with tax receipts, but it’s a classic example of opportunity costs.

“$870 for Corporate Tax Subsidies… [and] $1,231 for Revenue Losses from Corporate Tax Havens[.]”

As is well known, very large corporations and very wealthy individuals, through sundry acts of accounting legerdemain, pay the U.S. Treasury very little. But the government has to spend money on all that good stuff like national defense and space robots with lasers on Mars, so the average American ends up footing the bill. The assumption here is that if corporations and offshore-account holders paid more, the tax burden on Americans could be lowered. The “lost revenue” is calculated, though, based on what one particular tax-fairness advocacy organization thinks corporations should pay; it’s a subjective, made-up number (a more centrist organization might come up with a lower number; a radical left-wing organization might argue that corporations should give up all of their profits to the state and come up with a vastly higher number).

You can argue all day long that the political, economic, and financial systems in the United States are wildly stacked in favor of corporations, and Meme Killer won’t gainsay you—that’s a matter of personal values and opinion. But don’t try to come up in Meme Killer’s house and switch mid-sentence, without telling anybody, from talking about how tax dollars are actually spent to how private industry profits from the patent system and what you think the corporate tax rate should be, because Meme Killer will call out your sneaky bullshit. Quit faking those push-ups, BitchyPundit, we can all see what you’re doing. It’s not going to make you any stronger.

Whenever the Interwebs deign to spread their plague of misinformation and charlatanry, Meme killer is there with a bottle full of whiskey and a barrel full of snark. There to dispense facts and logic, so that ignorance is halted in its text and catchy imagery.


  1. I really appreciate your explanation. I’d still like to know what the real number is though. If you’ve only roughly counted big oil subsidies, there’s more to be tallied. Also, I would argue that earned income credit is a corporate subsidy and should be counted. It’s a tax payer sponsored patch to cover the space between a living wage and what corporations pay their workers.

  2. I really wish you’d spent time researching the real figures here, rather than picking a different article — and Bitchy Pundit’s modification of the figures — apart. For a start, the $6,000 figure in the cited article is an average amount per household: Bitchy Pundit’s readership (in general) might bring in less than average. So really, $4,000 is just a conservative estimate. There’s nothing wrong with a conservative estimate.

    Secondly — and this is the really irksome part — you could have spent an equal amount of time actually corroborating these figures rather than dismantling the entire point of the meme. To insinuate that we only contribute $58 per year, on average, to BS corporate (and related) subsidies is…well frankly that’s a bunch of tosh. For a start, you’re basing your figures on your own opinion rather than any concrete standard. That’s inherently flawed.

    *You* can argue the toss all day long about this (just paraphrasing the beginning of your final paragraph there) — but in the end, *your* logic is just as erroneous as the Bitchy Pundit methodology *you* assert is faulty. All you’ve done is deflect attention away from the very real issue here and in doing so, you’ve just disempowered rather effective little image and given power to right wing naysayers. Frankly, that’s really sad. Let’s get real: society is unbalanced and it needs to change. Maybe it’d be more effective to spend energy uncovering the nasty truths around us rather than trying to be clever at the expense of progress. Your call.

  3. I think misleading people to forward your agenda is wrong. Pointing out when someone does that is a worthy pursuit. I don’t think that you should then be required to come up with a better truth. People should do their own looking.

  4. We have no shortage of people critiquing but offering nothing in its place. The thing I appreciate in the meme is at least a passing attempt to argue for a reapportionment of values and money as an alternative. Okay that’s still somewhat weak. There are no follow up details, and like Occupy Wall Street, more based on “wake up” outrage than, “Okay, let’s now do something better” (like perhaps boycotting targeted corporations who are the worst offenders… never happened). However, I do get frustrated by supposed debunkers, who do not at least offer qualified support the gist of the argument, and the thrust of the action even if they disagree with its calculations. The thrust of this meme is not just a matter of “opinion”. It is a matter of fact. People making hundreds of millions of dollars in income and corporations making billions are paying no taxes, and yet you and I are, and yet those people and corporations claim the right to use and abuse those privileges granted by citizenship.

  5. Just ran across this piece as this meme has a way of popping up now and again.

    As with most anything related to taxes it’s not too hard to spin information. It’s almost impossible to determine subsidies. Just as it is almost impossible to determine the amount of money the extremely wealthy ‘hide.”

    But I don’t believe that’s the real point of this meme. My takeaway is 7 bucks a year for welfare and 36 bucks to keep kids fed. The anger from the “real “muricans’ around those issues doesn’t seem quite in line with the reality, does it?

    For me this is about one thing. That Americans have been trained to kiss the hand that beats them. And that disgusts me.

  6. If you look at the source article, the $6000 number is broken down into 7 categories. Five of those categories are money spent by the government. Two of those categories are corporate tax avoidance. Those two categories added together equal $2,001. So, the $4000 is the actual money spent by the government across the other 5 categories.

    It’s not clear, however, where this money comes from. For example, $696 of that $4000 is “state/county/city incentives”.

  7. To add to the point of Bobo Boboman: I don’t get the rationale behind dismissing the part that is “not part of your federal tax dollars”. Nowhere in the meme it says it’s about federal tax, that is an invention of the author of this article – and creates a rather unfortunate straw man. For the tax payer (what this graph is about) it doesn’t really matter whether you pay for something through local or federal taxes.
    BTW, on a side note regarding the opportunity costs: if concrete tax deductions exist for some specific groups, than it is more than fair to see it as a subsidy. As long as the deductions are concrete enough, the difference between subsidy and deduction is mere semantics. But as Bobo above says, it seems that in this case those categories have been dismissed anyways.

What do you think?