The problem with corporate welfare


New Member
Jun 10, 2007
United States
The problem with corporate welfare is this.

The theory behind corporate welfare is that if you let corporations have tax breaks, they in turn can use that money to increase their business and then in turn create more jobs for the American people.

Now I believe this is a fair economic theory and does work and have merit, However.

When you give corporations huge tax breaks this shifts the tax burden to the American worker, Now the corporations are producing jobs, but the American people have no money. And if the common American has less take home pay due to taxes. they in turn spend less, Which creates a major flaw in the ideal.

For if the American citizen spends less at the store, then the corporations don't sell as much goods, which in turn creates less profits for the corporations and in turn creates employee layoffs

It would seem the thing to do would be that in time of extreme unemployment to create some corporate tax breaks. and spur a business expansion creating more jobs And in times of low consumer confidence and low unemployment to shift the corporate tax breaks back down to the American consumer so all those people with jobs have enough money to spend on the goods the corporations produce

That said I believe in our current economy it is time to shift that tax break to the American consumer and temporarily shift a little bit of the tax burden up toward the major corporations, (Such as Exxon mobile, and other high profiting current corporations) who can now afford it.

This would without doubt put more money in the American publics pocket so they could purchase more items from these corporations (Such as buying gasoline for that nice confident drive through the country)

In other words to every thing their is a season, and I believe it is economically time to temporarily shift the tax burden upward towards the American corporations a little for a moment, so the American public can have some money to spend and to propel the economy.

Now if you want to give both corporations and American citizens a tax break, then you must first curtail government spending
My problems with corportate welfare have more to do with how it is decided who gets it and why and what is then done with the tax credits. Firstly the credits are usually kept as profit and not passed onto the consumer. Secondly it is not the companies that truly need it that get them. I would not give any credits to companies who are going broke because of poor management, see several of the airline companies in the early 2000's as an example. In cases of absolute need in the economy and a low profit margin that is caused by things out of the control of the company, then I would understand.
Which makes me think of having a flat tax system that applies to people and corporations alike. Another thing that bothers me is that how corporations are allowed to give nearly endless amounts of political contributions, while corporations are not people and cannot vote but yet they as an entity often have much more power than the general poppulation.
How about we get rid of corporate welfare and we get rid of individual welfare too.

Everyone should pay the fair and appropriate tax without gov trying to shape the social structure of our lives through fiscal policy.

If a company wants to set up shop in a particular state because they know they will be treated fairly that's great, but let's not give them special incentives to move into town. Once they get these special incentives they will continue to blackmail us into giving them to them.

At the same time let's not tax them so unfairly that they will definitely move to another state or even another country.

I say we tax all corps at 10 % with one modest deduction no exceptions no evasions. Then we tax all individuals at 10% with one modest deduction no exceptions no evasions.

If you are poor or in fear of going out of business the one deduction (say the first 10k of income is untaxed) will be enough to offset your tax burden but if you make more than others you will get your deduction and then pay taxes on the rest.