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How are corporate subsidies in the U.S. quantified and what year produced a $700 per-person estimate?
Executive Summary
Two distinct methods are used to quantify corporate subsidies in the United States: aggregating federal, state and local government outlays and converting program totals into per‑person or per‑family averages. The commonly cited “$700 per person” figure traces to media and advocacy calculations that divided multi‑billion dollar totals for state and local business incentives by the population, with a prominent iteration appearing around 2013 in coverage that rounded an approximate $696 per‑family result to $700 [1] [2]. These estimates depend heavily on which programs are counted (federal vs. state/local), whether tax expenditures are included, and the population denominator used, so the year and method matter as much as the headline number [3] [4].
1. How the Math Is Done — Counting Programs, Adding Up Dollars, and Dividing by People
Analysts quantify corporate subsidies by assembling line‑item totals for specific programs — direct grants, tax expenditures (credits, deductions), below‑market loans, loan guarantees, targeted procurement and explicit incentives offered by state and local governments — then summing those categories into a single annual estimate and dividing by a population or household figure to create a per‑person or per‑family number. This approach appears across think tanks and media: federal subsidy tallies come from budgetary and appropriations reports, while state and local incentives are tallied from municipal reports and investigative databases; the resulting totals produce per‑person metrics by dividing the aggregate by U.S. population or households, which creates headline‑friendly but methodologically sensitive numbers [3] [1]. Differences in scope — whether tax expenditures are included or whether state/local deals are counted — drive large swings in the final per‑person figure [5] [4].
2. Where the $700 Figure Emerged and Why 2013 Is Often Cited
The roughly $700 figure commonly cited in popular accounts stems from dividing aggregated state and local incentive totals — reported in the early 2010s as roughly $80 billion annually — by the U.S. population, producing a value near $696 per family and thereby rounded to $700 in coverage. Reporting and advocacy pieces around 2013 repeated this per‑family/per‑person shorthand, anchoring the $700 number to that period’s state/local incentive tallies rather than to a single definitive federal accounting [1] [2]. Alternative estimates anchored to federal corporate welfare produce different per‑person numbers (for example, $80–$100 billion federal tallies produce lower per‑person values when spread over the population), illustrating that the $700 number is a product of specific scope and rounding choices [3] [4].
3. Contrasting Estimates: Federal-Only vs. Combined Federal-State Totals
Analysts such as Hoover and Cato provide federal‑centric estimates that count budgetary outlays and tax expenditures, yielding annual ranges often much lower on a per‑person basis than combined federal‑plus‑state tallies; these federal‑only tallies are commonly cited in conservative policy analyses and produce per‑person figures in the low hundreds when divided by population [3] [4]. By contrast, investigative databases and nonprofit trackers that aggregate state and local incentive deals — often including large corporate attraction packages and tax abatements — produce the larger aggregate totals that, once divided by the population, generate the $700‑style headline [2] [1]. The divergence reflects different editorial and methodological choices: what counts as “subsidy” and which jurisdictions are included [5] [6].
4. Methodological Caveats That Change the Headline Quickly
Small changes in methodology create big swings: including or excluding tax expenditures (which are often the largest single component), counting multi‑year commitments in a single year, or using households vs. individuals as the denominator alters per‑person estimates materially. Some analyses treat tax code preferences as subsidies; others exclude them, focusing only on explicit appropriations or negotiated incentives. The transparency of state programs also varies — many state programs do not disclose recipients — which introduces data gaps and uncertainty into any per‑person calculation [2] [6]. These caveats show that the headline number is less a fixed fact than a function of definitional choices and available disclosure.
5. What This Means for Interpreting Future Claims
When encountering per‑person subsidy headlines, check three things: whether the number aggregates federal, state, and local programs or only one layer of government; whether tax expenditures are included; and what population denominator is used. The $700 per‑person figure is traceable to early‑2010s state/local incentive aggregates and journalistic rounding, not to a single, universally accepted federal accounting [1] [3]. Readers should treat such per‑person figures as illustrative shorthand rather than precise fiscal accounting, and seek the underlying program lists and year of measurement before using the number in policy debate [5] [4].