Corporate Welfare vs. Social Welfare

Opponents consider the tax breaks to be corporate welfare and say that states are engaged in a race to the bottom, dangling ever-larger carrots in front of companies as they compete against each other to lure businesses. The result is states have to rely to a greater degree on personal income tax, sales taxes and other revenue streams, critics say.

Which is worse corporate welfare or social welfare?

Corporate welfare challenged in court.
Corporate welfare shame page.

I think corporate welfare is the worst of the two. I listened to a business associate try to explain that corporate welfare is a natural extension of Reagan's voodoo economics trickle-down theory. When you have to pay for corporate welfare, there is no trickle-down effect. The money leaves your wallet and goes upstream to big business. In theory, it's supposed to be the other way around!

I am a proponent of the Regan theory of 'trickle-down', however I think it is being greatly abused today and needs an intense overhaul. Maybe with some regulations requiring that the companies that recieve federal benifits to increase employment by a certain percentage would help. Social welfare, on the other hand, is abused just as much and needs a similar overhaul. Which is worse? In the condition they are now, I would say that 'corporate welfare' is in a greater need of change as they don't need the assistance neccissarily like many do on social welfare who are not abusing it.

Corporate welfare serves a vicious double-whammy. They either receive a large tax-incentive and remain in the US or they threaten to consider alternative options, such as outsourcing jobs overseas. It's a classic Catch-22 scenario.

Not neccissarily, if proper changes are put in place. It could be a great system if all the loop holes and opportunities for corporations to take advantage of it, such as you have mentioned, are taken out as viable options.

While I believe in helping the unfortunate get back on their feet, ALL forms of welfare tend to make people indolent, and incapable of caring for themselves. The same is true of corporations.

Example: General Dynamics.

Originally, GD was a mainstay of American business, they were a leading manufacturer of refrigerators for several decades. But then they got into the business of building ships for the navy. And now, 4 decades later, they are incapable of doing anything else.

Government money is like heroin. It steals initiative, it makes people LESS able to carry on a trade, it makes them increasingly dependent on ever greater doses, just to maintain the same high. Eventually, the addict doesn't even really get high any more---he just needs a fix in order to "be normal."

Bailout of Chrysler, of the airlines, of farming, etc. and etc.

I think "business incentives" should be outlawed, since they are not offered across the board. They are a violation of equal treatment under the law. And they incite business to commit blackmail.

The export businesses that made the USA a world leader were the ones that didn't get any government support. But now that it's all about incentives and kickbacks, America exports less and less.

Which is worse? neither, and both. They are the same thing.

Instead of welfare, we should be equipping our citizens, and our companies, to contribute to the economy, instead of sucking the life out of it.

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if they could find a way to actually make a fair system to hand the money out, I wouldn't be so negative of their programs. but as it is, I think they are both unconstitutional.

In upstate NY they have this thing they've been trying to get off the ground for years now called Destiny USA. it's amazing just how much they can stretch the laws, or downright break the laws, just to give this guy the money to build this danged thing, while keeping the impression alive that the taxpayers isn't paying the tab. the kicker for me was when they wanted to use public domain to evict somewhere around 10-20 established businesses for thier land. It's NY for crying out loud!!! Every business is struggling to make a profit, they all could use a little help, and none should have that kind of headache (last nail in their coffin in the case of some of these businesses!!), handed to them by the government.

so, I think the whole mess is quite unconstitutional. In a country where far too many are struggling to keep their businesses running, or paying their medical bills, or keeping the roof over their heads, or food on the table.......where in the constitution does it give the government the power to decide just what criteria should be used to help just a few.....what gives them the power to determine who is worthy of this help, and who isn't....in some cases, which business or individual should live and which should die.....


by the way, I thought virginia would be different, it isn't....happened again....

a coworker has found a new place to live and is moving, we are looking to move. we've already decided that the place she is moving to is a little too steep for our budget, but there's another one we are interested in, the rent is more reasonable....
she found the rent for the one that we decided to check into too steep....

why the difference of opinion??? her rent is subsidized if she rents from the higher place and isn't at the cheaper one.....we're not relying on subsidies for our rent, so well, her choice isn't feasible for us. we'll be lucky if we find a place that isn't in the slums....

I know I have a huge chip on my shoulder about living in Texas; but I've lived a lot of other places, and the negative climate of a lot of states (particularly back East, no offense) is a palpable thing.

Last year, when the supreme court OK'd immanent domain for "business development" by local governments, there was a race to the floor of the Texas Senate to see who could be first to author a bill outlawing the practice in the lone star state. I think it passed unanimously, or nearly so.

We moved recently, and I was offered a position with a company in Virginia. I have always wanted to live there, I think it's gorgeous; I'm also a history buff. But we started looking at the price of housing, and then the TAXES.

I had to explain to my wife about "state income tax," and finally told her that some cities in the northeast actually tried a "city income tax." (I think Albany, NY has that; but I could be wrong).

She was totally freaked out. Especially when I told her about the powers police have in places like Massachussetts, and about gun registration laws. And about how I had to pay a $400 fee for moving my texas car to Georgia!

So we moved, but staid in TX.

That said, midsize texas towns are TOTALLY sucked into the black hole of offering "rebates" to megacorps to locate there.

The irony is, you get a better tax base by having a low rate, with lots of mom & pops, and then the corps will locate there anyway---without being able to dictate terms to local government.

I have heard that Marrietta Georgia grew so much by getting a waiver from the state, and charging an across-the-board sales tax of less than 5%. Business from all over the US headquartered there. And even after the low rate expired, they stayed.

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I think most of you are totally missing the point of tax incentives to lure businesses to a particular place.

Just for starters, what would be the tax collections from that business if they located elsewhere? Secondly, think of the number of new jobs that will be created by getting the business to locate there. That means new tax paying citizens will locate as well, not to mention that all those new employees will spend the bulk of their incomes locally, thus supporting other local businesses. Besides, the incentive packages are generally only good for a few years anyway. Mostly incentives to lure businesses turn out to be a good thing for the cities & towns that do the luring. They aren't welfare programs at all since they always result in a net gain for the communities.

by maria_stardust:
I think corporate welfare is the worst of the two. I listened to a business associate try to explain that corporate welfare is a natural extension of Reagan's voodoo economics trickle-down theory. When you have to pay for corporate welfare, there is no trickle-down effect. The money leaves your wallet and goes upstream to big business. In theory, it's supposed to be the other way around!

REPLY: Lowering the tax rate is not a political tool, it's an economic tool, and it's worked every single time it has been used; when Queen Elizabeth the 1st used it, also when John Kennedy, Reagan and now with Bush. Your description on "how it works," and the results, is not correct.

Social welfare is unconstitutional, and does the most to damage both the economy, and personal liberty and freedom.

Corporate welfare serves a vicious double-whammy. They either receive a large tax-incentive and remain in the US or they threaten to consider alternative options, such as outsourcing jobs overseas.

REPLY: This is true, as high corporate taxes, both state and local, keeps wages down and makes it more difficult to compete. Part of the outsourcing is a direct result of the failing government school system. Reagan warned us long ago the they were "dumbing down" our kids. How correct he was.

The best soulution all the way around is to get rid of the broken (and illegal) 9 million word tax code, and incorporate the Fair tax.

Mostly incentives to lure businesses turn out to be a good thing for the cities & towns that do the luring.

REPLY: If the taxes weren't so high, localities wouldn't have to "lure" companies.

[edit on 24-7-2006 by zappafan1]