(04-21-2015 06:31 PM)miko33 Wrote:  

(04-21-2015 05:57 PM)UConn-SMU Wrote:  Just a thought on this...

My father worked many years at IBM. The federal government harassed IBM for decades with lawsuit after lawsuit because they were too successful. Meanwhile, the Japanese government subsidized IBM's competitors with trillions of yen per year.

IBM never saw any of that "corporate welfare". The truth was exactly the opposite. Our government is far more likely to harm business than support it.

Not quite. The gov't picks winners and losers. The companies listed in one of the links in the OP showed which companies got a disproportional share of gov't aid. That plus favorable loans to solar companies are favorites of the gov't, or more accurately cronies of those currently in power.

The government did what it could to harm IBM, so I guess the government was trying to make them a loser.

The government has no business picking winners and losers. But preventing an activist government from doing that is easier said than done. Government's power is never reduced. The best we can hope for is to slow its growth.

(04-21-2015 09:10 PM)UConn-SMU Wrote:  

(04-21-2015 06:31 PM)miko33 Wrote:  

(04-21-2015 05:57 PM)UConn-SMU Wrote:  Just a thought on this...

My father worked many years at IBM. The federal government harassed IBM for decades with lawsuit after lawsuit because they were too successful. Meanwhile, the Japanese government subsidized IBM's competitors with trillions of yen per year.

IBM never saw any of that "corporate welfare". The truth was exactly the opposite. Our government is far more likely to harm business than support it.

Not quite. The gov't picks winners and losers. The companies listed in one of the links in the OP showed which companies got a disproportional share of gov't aid. That plus favorable loans to solar companies are favorites of the gov't, or more accurately cronies of those currently in power.

The government did what it could to harm IBM, so I guess the government was trying to make them a loser.

The government has no business picking winners and losers. But preventing an activist government from doing that is easier said than done. Government's power is never reduced. The best we can hope for is to slow its growth.

That's why the tax code for corporations and private citizens is so important. Our elected officials as well as professional bureaucrats like to use the code to both encourage behaviors, discourage others and to outright force behaviors to be done through the tax codes. That's one facet.

The other facet is more of a simple game of graft. You get kickbacks and contributions to your coffers from your buddies. You in turn give your buddies preferential treatment thru contracts, grants and special tax deals that competitors who are not "friends" do not get access to. It's no accident that less than 1000 of all the corporations in the U.S. get 75% of the goodies Uncle Sam doles out to help corporations.

(04-21-2015 04:16 PM)Fitbud Wrote:  I never said they were good or bad. I used to run a home business which is why I know about these things.

The term 'corporate welfare' which was the topic is a misleading term. I think we generally agree that many of the deductions that companies get are perfectly legitimate... and while yes, you can deduct far more items if you are a business than if you are an individual, it is because a business (even a home based one) does far more things to generate that revenue to be taxed on than an individual does... but to the extent that an individual DOES spend money to generate their revenue (child care, uniforms, home office etc) they too can deduct their expenses. Heck, they can even deduct expenses without having them (the standard credit).

This isn't welfare, but accounting. Not arguing with you, but with the OP.

The difference comes in with those tax incentives designed to encourage behavior by corporations... whether it be to relocate a factory or hire 'certain' people or be green or whatever else. They usually sound good on paper, but once you see what a smart company can do to maximize the benefits of such an incentive, they usually don't look as good later.

THIS is what people are generally talking about when they talk about corporate welfare, and it is government's fault, not the corporations.

I'm not saying corporations are without fault. They certainly are not. What I'm saying is that corporations are very predictable... yet the government can't seem to figure them out. They always seem surprised when corporations find ways to suck the marrow out of any incentives directed at them and barely do the minimum in meeting the requirements for those incentives. Seriously, WHY does this surprise ANYONE?

It's why I always argue that if the government wants something done (whether I personally agree with it or not) they should just do it themselves rather than try and make industry do it for them. Unfortunately, both the left and the non-libertarian/old-style Republican right don't seem interested in actually addressing these problems... and we're collectively too stupid to see that they profit from the problems (by either blaming corporations or promising to make them do things) and not the solutions

example... If the government wants to raise the min wage or encourage the hiring of vets or whatever else, then all they have to do is a 'reverse' FICA/FUTA... adding to their paycheck rather than withholding from it. The employee is happier because he is getting paid more and the employer gets a better employee for 'the same' money as a worse one. If my choices for my $8/hr job are a kid fresh out of high school with no experience for $8 or one fresh out of the army with 4 years experience for $8 who net gets paid $12 because of the government or one who has been working at something else for 4 years but they want $12 from me... Which one would YOU (generally) hire? That's far better (in my mind) than giving the company a 'tax credit' for a portion of the salary they pay the vet... because the government can assure that the 'welfare' goes to the person, not the company.

Great example of corporate welfare, and probably the biggest abuse you can find out there in recent history.

http://www.ij.org/the-end-of-an-eminent-domain-error

(04-22-2015 12:24 PM)miko33 Wrote:  Great example of corporate welfare, and probably the biggest abuse you can find out there in recent history.

http://www.ij.org/the-end-of-an-eminent-domain-error

Maybe the worst ever.

(04-22-2015 12:31 PM)Owl 69/70/75 Wrote:  

(04-22-2015 12:24 PM)miko33 Wrote:  Great example of corporate welfare, and probably the biggest abuse you can find out there in recent history.

http://www.ij.org/the-end-of-an-eminent-domain-error

Maybe the worst ever.

Did Pfizer come to the government asking for it? Or did New London go to Pfizer? I don't blame Pfizer for asking the government for 'the best deal'... I blame the government for allowing it. All they had to say was 'no'.

This may be an exception, but I suspect that it is the latter far more often than the former

They try and blame it on the courts a bit... but the law allows for eminent domain for 'business development' so they couldn't really have stopped it.

I'm not saying that these things don't happen... I'm more saying that when people talk about corporate welfare, they are only infrequently talking about situations where the corporation started the conversation. Why we wouldn't expect people who successfully negotiate things with other professionals for a living (corporations) to be better at it than politicians... who only need to convince the lowest information voters... is beyond me.

(04-22-2015 12:46 PM)Hambone10 Wrote:  

(04-22-2015 12:31 PM)Owl 69/70/75 Wrote:  

(04-22-2015 12:24 PM)miko33 Wrote:  Great example of corporate welfare, and probably the biggest abuse you can find out there in recent history.
http://www.ij.org/the-end-of-an-eminent-domain-error

Maybe the worst ever.

Did Pfizer come to the government asking for it? Or did New London go to Pfizer? I don't blame Pfizer for asking the government for 'the best deal'... I blame the government for allowing it. All they had to say was 'no'.
This may be an exception, but I suspect that it is the latter far more often than the former
They try and blame it on the courts a bit... but the law allows for eminent domain for 'business development' so they couldn't really have stopped it.
I'm not saying that these things don't happen... I'm more saying that when people talk about corporate welfare, they are only infrequently talking about situations where the corporation started the conversation. Why we wouldn't expect people who successfully negotiate things with other professionals for a living (corporations) to be better at it than politicians... who only need to convince the lowest information voters... is beyond me.

Agree 100%. Why should a corporation be under any obligation to refuse any legal deal that is offered to it?

In particular, this applies to moving operations to jurisdictions with lower tax rates.

(04-22-2015 12:50 PM)Owl 69/70/75 Wrote:  

(04-22-2015 12:46 PM)Hambone10 Wrote:  

(04-22-2015 12:31 PM)Owl 69/70/75 Wrote:  

(04-22-2015 12:24 PM)miko33 Wrote:  Great example of corporate welfare, and probably the biggest abuse you can find out there in recent history.
http://www.ij.org/the-end-of-an-eminent-domain-error

Maybe the worst ever.

Did Pfizer come to the government asking for it? Or did New London go to Pfizer? I don't blame Pfizer for asking the government for 'the best deal'... I blame the government for allowing it. All they had to say was 'no'.
This may be an exception, but I suspect that it is the latter far more often than the former
They try and blame it on the courts a bit... but the law allows for eminent domain for 'business development' so they couldn't really have stopped it.
I'm not saying that these things don't happen... I'm more saying that when people talk about corporate welfare, they are only infrequently talking about situations where the corporation started the conversation. Why we wouldn't expect people who successfully negotiate things with other professionals for a living (corporations) to be better at it than politicians... who only need to convince the lowest information voters... is beyond me.

Agree 100%. Why should a corporation be under any obligation to refuse any legal deal that is offered to it?

In particular, this applies to moving operations to jurisdictions with lower tax rates.

As rational actors, if the opportunities are there for the taking, then any one or any corporation will pursue it. The problems crop up when a corporation takes advantage of the heavy tax breaks given up front and when the time comes for them to start paying normal taxes for the region they chose to build in decides to pull up stakes and move somewhere else as soon as those breaks expire is highly unethical in my book. It's a failure of not acting in good faith. Now whether Pfizer left CT because of the tax breaks expiring or if it was something unrelated to the tax breaks, I don't know. Regardless, it is corporate welfare and things like this need to come to an end in the long term. How that comes about because in these cases the taxes are determined on the state and local levels, I'm not sure.

The only takeaway I can think of is to stop using the tax code in such a way because in the end, if you play the game of high taxes with lots of breaks, exceptions and loopholes as a state or municipality, expect to get burned in the long term. The Kelo disaster is ultimately the fault of the local gov't - not Pfizer. However, if you can get gov'ts to lower the tax rates across the board AND eliminate the loopholes, credits, exemptions, etc that are the carrots to drive behavior then everyone would be better off in the long term. Too bad people have a natural proclivity to want to exercise authority over others simply because it strokes their egos...

I'd prefer eliminating all welfare, both individual and corporate and all income taxes. Eliminate all government social programs and entitlements of all kinds (social security, medicare, the whole lot) to all people and replace them with Chilean-style individually-owned and targeted accounts to be used at the option and discretion of individuals for assigned purposes--allow anyone to contribute, corporate or private, but all money immediately belongs to the individual, not the company or any government authority or agency. Eliminate all government distributed foreign aid and just stick to defending to country. If groups want to get together and form to enrich other nations, have at it privately with voluntarily given money. Make every state a right to work state. Unions optional, and have to prove their value to their customers (like the baseball players' union does) or die.

Allow only private non-profit societies to be formed to tackle any and all social "problems" and if they can't collect enough money for their cause then that means the market and the people don't deem it important enough to bother with spending money on. Kind of like what the people who started the country thought of.

Stop blaming companies that provide jobs for all the problems. Without companies there'd be no real jobs. A government position is never a job, it is government welfare. Anyone who works for the government is in a sense a welfare queen or king, from the politicians down to the schoolteachers, professors and social workers.

Accept that truth and move on with the fact that the United States has been bankrupt for 40-50 years and is just hiding that fact with debt.

(04-22-2015 03:26 PM)miko33 Wrote:  As rational actors, if the opportunities are there for the taking, then any one or any corporation will pursue it. The problems crop up when a corporation takes advantage of the heavy tax breaks given up front and when the time comes for them to start paying normal taxes for the region they chose to build in decides to pull up stakes and move somewhere else as soon as those breaks expire is highly unethical in my book. It's a failure of not acting in good faith.

How is it any less rational to do something when the opportunities are there for the taking than it is to stop doing them when the opportunities cease? It's somewhat self-evident that they wouldn't have done 'whatever they did' without the incentives, so when the incentives stop, so does (often) 'whatever they did'

I'm somewhat indifferent between Joy and Dawn, but Dawn is more expensive so I don't usually buy it. They sometimes send me coupons to get me to try it and I will... because it is in my own best interests to do so... and when they stop sending me the coupons, I stop buying it.... UNLESS it is a better product and worth spending more on... again, in my own interests.

I too don't know the circumstances of the Pfizer deal... but I don't expect Pfizer to EVER not act in their own best interests... conscious of the fact that SOMETIMES, being a good neighbor is in a company's best interests.



Not trying to tell you how to think, but IMO, the takeaway is that the government shouldn't EVER expect a company to act in 'the public interest'. That isn't what they do. They act in their own interests. If the government wants to do something for the public good, then they need to do it themselves and not try and 'bribe' a company to do it for them.

(04-22-2015 04:33 PM)Hambone10 Wrote:  

(04-22-2015 03:26 PM)miko33 Wrote:  As rational actors, if the opportunities are there for the taking, then any one or any corporation will pursue it. The problems crop up when a corporation takes advantage of the heavy tax breaks given up front and when the time comes for them to start paying normal taxes for the region they chose to build in decides to pull up stakes and move somewhere else as soon as those breaks expire is highly unethical in my book. It's a failure of not acting in good faith.

How is it any less rational to do something when the opportunities are there for the taking than it is to stop doing them when the opportunities cease? It's somewhat self-evident that they wouldn't have done 'whatever they did' without the incentives, so when the incentives stop, so does (often) 'whatever they did'

I'm somewhat indifferent between Joy and Dawn, but Dawn is more expensive so I don't usually buy it. They sometimes send me coupons to get me to try it and I will... because it is in my own best interests to do so... and when they stop sending me the coupons, I stop buying it.... UNLESS it is a better product and worth spending more on... again, in my own interests.

I too don't know the circumstances of the Pfizer deal... but I don't expect Pfizer to EVER not act in their own best interests... conscious of the fact that SOMETIMES, being a good neighbor is in a company's best interests.



Not trying to tell you how to think, but IMO, the takeaway is that the government shouldn't EVER expect a company to act in 'the public interest'. That isn't what they do. They act in their own interests. If the government wants to do something for the public good, then they need to do it themselves and not try and 'bribe' a company to do it for them.

I agree that companies should do what is in their best interests and that no one should expect companies to be altruists. But this example goes beyond simply acting in your best interests. I would hope that gov't officials would have included within their agreement with Pfizer some assurances that it would stay in the area for X number of years beyond the expiration of the tax breaks. If they did not, then they were idiots. Logic would dictate that if any company can be given special tax deals and can later disappear the moment those deals expire, then no company would ever pay taxes. Therefore, something inept happened that resulted in this fiasco, or some sort of cronyism occurred between gov't and Pfizer.

Either way, the root cause was corruption built into the situation due to an inherently corrupt tax code that allows too many exceptions. The best solution is to cut out the loopholes and exceptions while dropping tax rates. That way, you eliminate crony capitalism and gov't incompetence. And, all businesses large and small are competing on a level playing field.

(04-22-2015 05:06 PM)miko33 Wrote:  

(04-22-2015 04:33 PM)Hambone10 Wrote:  

(04-22-2015 03:26 PM)miko33 Wrote:  As rational actors, if the opportunities are there for the taking, then any one or any corporation will pursue it. The problems crop up when a corporation takes advantage of the heavy tax breaks given up front and when the time comes for them to start paying normal taxes for the region they chose to build in decides to pull up stakes and move somewhere else as soon as those breaks expire is highly unethical in my book. It's a failure of not acting in good faith.

How is it any less rational to do something when the opportunities are there for the taking than it is to stop doing them when the opportunities cease? It's somewhat self-evident that they wouldn't have done 'whatever they did' without the incentives, so when the incentives stop, so does (often) 'whatever they did'

I'm somewhat indifferent between Joy and Dawn, but Dawn is more expensive so I don't usually buy it. They sometimes send me coupons to get me to try it and I will... because it is in my own best interests to do so... and when they stop sending me the coupons, I stop buying it.... UNLESS it is a better product and worth spending more on... again, in my own interests.

I too don't know the circumstances of the Pfizer deal... but I don't expect Pfizer to EVER not act in their own best interests... conscious of the fact that SOMETIMES, being a good neighbor is in a company's best interests.



Not trying to tell you how to think, but IMO, the takeaway is that the government shouldn't EVER expect a company to act in 'the public interest'. That isn't what they do. They act in their own interests. If the government wants to do something for the public good, then they need to do it themselves and not try and 'bribe' a company to do it for them.

I agree that companies should do what is in their best interests and that no one should expect companies to be altruists. But this example goes beyond simply acting in your best interests. I would hope that gov't officials would have included within their agreement with Pfizer some assurances that it would stay in the area for X number of years beyond the expiration of the tax breaks. If they did not, then they were idiots. Logic would dictate that if any company can be given special tax deals and can later disappear the moment those deals expire, then no company would ever pay taxes. Therefore, something inept happened that resulted in this fiasco, or some sort of cronyism occurred between gov't and Pfizer.

Either way, the root cause was corruption built into the situation due to an inherently corrupt tax code that allows too many exceptions. The best solution is to cut out the loopholes and exceptions while dropping tax rates. That way, you eliminate crony capitalism and gov't incompetence. And, all businesses large and small are competing on a level playing field.

If you want to source the corruption/root cause, you have to consider the fact that legislators are allowed to be lobbied on these matters by the very entities that will benefit from the legislation. I have no idea how to control this without curtailing free speech rights but the conflicts of interest inherent in political donations are a huge part of the problem.

(04-22-2015 07:44 PM)Brookes Owl Wrote:  If you want to source the corruption/root cause, you have to consider the fact that legislators are allowed to be lobbied on these matters by the very entities that will benefit from the legislation. I have no idea how to control this without curtailing free speech rights but the conflicts of interest inherent in political donations are a huge part of the problem.

The way to get money out of government is to get government out of the business of allocating money.

As long as government gets to pick winners and losers, many people will find it worthwhile to purchase influence.

(04-22-2015 05:06 PM)miko33 Wrote:  

(04-22-2015 04:33 PM)Hambone10 Wrote:  I agree that companies should do what is in their best interests and that no one should expect companies to be altruists. But this example goes beyond simply acting in your best interests. I would hope that gov't officials would have included within their agreement with Pfizer some assurances that it would stay in the area for X number of years beyond the expiration of the tax breaks. If they did not, then they were idiots. Logic would dictate that if any company can be given special tax deals and can later disappear the moment those deals expire, then no company would ever pay taxes. Therefore, something inept happened that resulted in this fiasco, or some sort of cronyism occurred between gov't and Pfizer.

Either way, the root cause was corruption built into the situation due to an inherently corrupt tax code that allows too many exceptions. The best solution is to cut out the loopholes and exceptions while dropping tax rates. That way, you eliminate crony capitalism and gov't incompetence. And, all businesses large and small are competing on a level playing field.

I agree with this. My only disagreement with you is the APPEARANCE of placing the blame on the corporations. That's like placing the blame on the chimpanzee of the woman whose face was torn off. The chimp was merely being a chimp. It was the woman who tried to make him be a pet. Corporations are NOT altruistic by their nature, and government often uses these 'incentives' to try and make them be so. No matter how tame they can appear, It should NEVER surprise us when they revert back and behave like simple animals.

(04-22-2015 09:57 PM)Owl 69/70/75 Wrote:  [quote='Brookes Owl' pid='12002698' dateline='1429749849']
If you want to source the corruption/root cause, you have to consider the fact that legislators are allowed to be lobbied on these matters by the very entities that will benefit from the legislation. I have no idea how to control this without curtailing free speech rights but the conflicts of interest inherent in political donations are a huge part of the problem.

The way to get money out of government is to get government out of the business of allocating money.

As long as government gets to pick winners and losers, many people will find it worthwhile to purchase influence.

Yup. The numbers we talk about these days are so large that MASSIVE amounts of money can be 'ignored', and politicians admit that they don't have time to actually read the bills they're signing.

The 2015 budget is 3.9 trillion dollars. How do we know that this is the REAL amount of money necessary? Could it not just as easily be 4.0 or 3.8 trillion instead? Those sound like minor differences until you realize that we're talking about a $200,000,000,000 swing. I don't know how big the Pfizer deal was, but let's assume it was $1byn, which would be a big number, right? It's still only 1/2 of 1% of that swing. It's a sprinkle on the 30 scoop Sundae.