Corporate Welfare

A recent conversation spurred me to write this post

A person I know asked me if conservatives support corporate welfare. Well, the short answer is no, of course not. The long answer is a bit more complex.

No, conservatives do not support corporate welfare, at least this one doesn’t. I certainly don’t agree that companies like GE had enough tax breaks last year and the year before to effectively pay zero taxes to the federal government. Yes, just like us, even with deductions you still pay taxes over the course of the year. The problem arises when companies like GE , that are extremely profitable all on their own, get favored tax status from the federal government ostensibly to spur growth, or to give them incentive to hire workers. If their product is good enough and priced fairly enough that should be all the incentive they need to stay in business and expand. I am using GE as an example but this applies to many industries in this country.

Know why sugar is so expensive? The feds use protectionism in the form of subsidies to protect domestic sugar growers from having to compete with cheaper sugar produced in foreign countries. This has led to the increased use of high fructose corn syrup in many of our products. It’s cheaper than sugar and therefore allows companies to stay price competitive in the marketplace. High fructose corn syrup is not as good as sugar for a variety of reasons, but it’s cheaper , so it is used instead of sugar.

Oil companies get subsidies from the feds too. I am pro oil, our OWN oil and very pro becoming energy independent. However, at the same time, there is no logical why we taxpayers should give any tax breaks to these multi-billion dollar industries. These are just a few examples , there are many more, too many to mention.

What do these subsidies/tax breaks do for us? Nothing good, that’s for sure. All of these things in general skew the market and directly affect prices we pay and not in a good way for us as consumers. Why are they there? Because this is how politicians on both sides of the aisle gain favor from these industries. This allows politicians to play favorites with this or that industry, Green Energy is yet another example of this problem. It is not up to the government to decide for us which way our economy is headed. That is for us to decide on our own as consumers. If company A makes a better product than company B, then company A will be more successful. That is how¬† free market works. To be clear, I support green energy, so long as it can replace our need for oil and in a cost-effective way. As of now, it can’t and our government throwing billions of our dollars at it , doesn’t change that one bit.

You might say, but, but , if we take away all of these incentives prices might go up, or some people could lose their jobs. Yes, both of these might happen, but if they do, other companies will come along to offer us a better and cheaper product or service. People that lost their jobs in company B will be able to find work at company A since company A is making a better product and thus increasing their need for additional workers. Like it or not, the Free Market will work out the kinks on its own. When the government gets involved it screws things up and makes it worse for the rest of us, not better.

All of this is basically an argument for abolishing our current tax system in favor of a Fair Tax or Flat Tax system. This allows all of us to “pay our fair share” while preventing the politicians from playing favorites and spending our money like drunken sailors, no offense to drunken sailors. I don’t fault companies for taking advantage of these tax breaks. There is nothing nefarious about them doing so, despite what you hear from our politicians. These are legally available to them. If you want to blame someone, blame Congress. They write the tax code, they are the ones that offered these tax breaks to these companies and they are the same people who get up in front of the cameras and claim it’s not fair that the “rich” are using tax loopholes to avoid paying their fair share.

Take all of this into account the next time you hear some politician complain about this or that industry and their tax breaks. Ask them, Well, if you’re not happy with their tax breaks, why do you not change the tax code to address the issue? When you hear liberal groups or conservative groups complain about the unfairness and evilness or this or that company or industry ask them…Who wrote the tax code? Who is it that is making it possible for this company to do the things you say are unfair? Don’t blame the companies, blame the morons in Washington DC.




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