Forum Groups

 

Forums / Politics / Are tax breaks to companies a form of corporate welfare?

Are tax breaks to companies a form of corporate welfare?

6 posts
  1. Melvin Waldron
    Melvin Waldron avatar
    43 posts
    2/17/2012 8:02 PM
    Just wanted to pose this question, What is the difference between corporate welfare and regular welfare? I just want to ask because I'm looking at tax breaks to encourage businesses to hire people, local and state governments give tax breaks to get companies to move in or keep them. What is the cost of these compared to just regular welfare given to citizens?

    I have to admit I always thought giving tax breaks to help stimulate the economy was good, but the more I think about it, if a business needs employees due to demand, that is when they would hire someone, I don't see a tax break providing enough to pay for new employees. So I have to wonder why do we give them, why not just collect the taxes and see if that helps with the debt. Of course we have to look at spending as well. I also know I have lumped all tax breaks together, there might be some that achieve the goal that they have set out to achieve. I can also look at them as a way to grow business, it's just the cynic in me that can also see it as corporate welfare too.

    Mel

    Melvin H. Waldron III, CGCS, Horton Smith Golf Course, City of Springfield/Greene County MO

  2. Clay Putnam
    Clay Putnam avatar
    33 posts
    2/18/2012 7:02 AM
    Mel,

    Corporate tax breaks and personal welfare are not even close to belonging in the same conversation. A couple points. Tax breaks provide job and economic growth that adds value to the location (local, state, and possibly nationally) of the business. Welfare is a crutch and a drag.

    Tax breaks and welfare are opposites, the antithesis of each other, yin & yang...



  3. Melvin Waldron
    Melvin Waldron avatar
    43 posts
    2/19/2012 2:02 PM
    Clay,

    I get what you are saying, I should have kept them separate. Maybe the question should be more about the tax breaks then. And both sides are giving them, at every level. I understand the reason behind tax breaks is the benefits of the recipient is the tax breaks would be paid through new workers, products and services that benefit from a business. I guess my real question is, do these tax breaks provide a return on the investment that they expect? I know here in Missouri they have given out tax breaks like Halloween candy and yet we are over 7 million in debt ( if not more)? Are these tax breaks working, how is it going to help with the debt crisis? It does create debt so what is replacing the tax revenue that was given in the break? Of course if local and state governments don't give them then do they lose businesses to other states and locations? This is all business oriented, what were to happen if no one was given these tax breaks? If a business wants to grow,they just naturally grow, if they want to move the move would be based on savings in running their businesses, whether it be location to other businesses or weather, etc.

    Just thinking that here we give businesses a break yet don't want to give the average citizen a break, and with the individual welfare, doesn't that spur local businesses where that person is going out to spend that money? I thought I have seen where that creates more money into the system then tax breaks.

    Mel

    Melvin H. Waldron III, CGCS, Horton Smith Golf Course, City of Springfield/Greene County MO

  4. Clay Putnam
    Clay Putnam avatar
    33 posts
    2/19/2012 7:02 PM
    Melvin Waldron, CGCS said: Clay,

    I get what you are saying, I should have kept them separate. Maybe the question should be more about the tax breaks then. And both sides are giving them, at every level. I understand the reason behind tax breaks is the benefits of the recipient is the tax breaks would be paid through new workers, products and services that benefit from a business. I guess my real question is, do these tax breaks provide a return on the investment that they expect? I know here in Missouri they have given out tax breaks like Halloween candy and yet we are over 7 million in debt ( if not more)? Are these tax breaks working, how is it going to help with the debt crisis? It does create debt so what is replacing the tax revenue that was given in the break? Of course if local and state governments don't give them then do they lose businesses to other states and locations? This is all business oriented, what were to happen if no one was given these tax breaks? If a business wants to grow,they just naturally grow, if they want to move the move would be based on savings in running their businesses, whether it be location to other businesses or weather, etc.

    Just thinking that here we give businesses a break yet don't want to give the average citizen a break, and with the individual welfare, doesn't that spur local businesses where that person is going out to spend that money? I thought I have seen where that creates more money into the system then tax breaks.

    Mel


    You are correct that tax breaks are given to either recruit business or retain business. If one state does not provide a tax break then another will to lure the business to their state. A tax break does not generally add to the debt for new business. The new business was not previously paying the state taxes so there was nothing to lose. It does lose revenue for an existing business that receives a tax break as a carrot to stay in the state, however, the consequence of losing the business can result in an even great lose. Tax breaks keep business in the state, keeps the locals employed, and creates revenue for the state from peripheral means; sales taxes, pay roll taxes, and the like. If a business is large enough it can bring peripheral business to the area resulting in additional revenue for the state. Tax breaks are also a political move. Most politicians don't want to be "the one" to let a large employer get away; not got for reelections. And the politician can say he/she created or saved jobs in his/her state.



  5. Robert Crockett
    Robert Crockett avatar
    4 posts
    2/20/2012 7:02 AM
    Clay Putnam, CGCS said: Mel,

    Corporate tax breaks and personal welfare are not even close to belonging in the same conversation. A couple points. Tax breaks provide job and economic growth that adds value to the location (local, state, and possibly nationally) of the business. Welfare is a crutch and a drag.

    Tax breaks and welfare are opposites, the antithesis of each other, yin & yang...

    Corps....are not truly Tax payers...More of Tax collectors...They collect it from us in the product or services they provide....And that's after Taxes are taken from your Check. Then you have the Luxury of paying more Taxes....Sales...etc..etc....



  6. Sandy Clark
    Sandy Clark avatar
    0 posts
    2/20/2012 9:02 AM
    Mel, one difference in your scenario is that you and I don't create jobs even though we are participants in the economy. The company enticed to our areas will generate jobs then tax money and more local spending then if the company had not come to town.



View or change your forums profile here.