I have divided my testimony on corporate welfare into 7 observations about the economic and political state of affairs regarding corporate welfare. Then at the end of my testimony I provide 6 recommendations regarding how Congress can reduce the size of the corporate welfare state.
1) Corporate welfare is a large and growing component of the federal budget. America's most costly welfare recipients today are Fortune 500 companies.
2) Almost all of the most egregious subsidies are in the forms of federal expenditures, not tax loopholes. If Congress is serious about weaning businesses from federal subsidies, it should concentrate on eliminating the Departments of Commerce and Energy, the Export Import Bank, the International Monetary Fund and the World Bank, farm subsidies, and OPIC.
3) Many Fortune 500 companies are double and triple dippers. All but a small handful of America's most profitable corporations have participated in the hunt for federal or state government subsidies. Most of these companies are double-, triple-, and quadruple-dipping.
4) There are no time limits for corporate welfare benefits. In the mid-1990s Congress and the states--at the urging of the American people--enacted major reforms in social welfare programs. There are now time limits on welfare benefits. Work, training, or education is now typically required in exchange for benefits. The result: welfare rolls are down by 40 percent over the past five years and record levels of former-recipients now working and paying taxes, not collecting them.
5) If all corporate welfare were eliminated, the savings would be large enough to entirely eliminate the capital gains tax or the death tax. continuing Table 3 below shows a sample of the types of pro-growth tax reduction initiatives that Congress could afford to undertake without adding a penny to the federal debt, if corporate welfare were entirely ended.
* We could cut the personal income tax, the corporate income tax, or the payroll tax.
* We could entirely abolish the capital gains tax or the death tax.
* We could help finance a flat tax at a rate of 20 percent for all Americans.
6) Corporate welfare corrupts the political process.
7) Corporate welfare reduces American competitiveness. Business subsidies, which are often said to be justified because they correct distortions in the marketplace, create huge market distortions of their own.
http://www.cato.org/testimony/ct-sm063099.html
AV,
Here's the bottomline with me, I'm against ALL forms of wealth redistribution. I'm against taking my or anyone's tax dollars under complusion or force and then transferring the fruit of my labor to someone else who did not earn, no matter what the cause or reason.
AV,
I've come to believe you are as big a socialist (although from a right perspective) as some of you claim towards the left and therefore you violate the core principle of laissez-faire, free market economics with your own form of gov't market intervention, a type of Mussolini/Gentile hybrid if you will. At the same time, just as the left would loadshift the tax burden onto a segment of society in order to drive an economic outcome in total violation of Laissez-faire principles, you do just the same in your own way. It's almost a Hegelian Dilectic reaction to the action of the left socialist. An antithesis which brings about the Hegelian synthesis which is greater gov't. Either way, the free individual loses.
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AV,
I just don't see this in the same way as you do. That's a Shocker!
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No matter how you cut it AV, you are a socialist who wants to tax me or whoever and then transfer that wealth to someone else who did not earn or labor to create that wealth in the first place.
AV,
Here's the bottomline with me, I'm against ALL forms of wealth redistribution. I'm against taking my or anyone's tax dollars under complusion or force and then transferring the fruit of my labor to someone else who did not earn, no matter what the cause or reason.
"Mr. Speaker – I have as much respect for the memory of the deceased, and as much sympathy for the sufferings of the living, if suffering there be, as any man in this House, but we must not permit our respect for the dead or our sympathy for a part of the living to lead us into an act of injustice to the balance of the living. I will not go into an argument to prove that Congress has no power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money. Some eloquent appeals have been made to us upon the ground that it is a debt due the deceased. Mr. Speaker, the deceased lived long after the close of the war; he was in office to the day of his death, and I have never heard that the government was in arrears to him. This government can owe no debts but for services rendered, and at a stipulated price. If it is a debt, how much is it? Has it been audited, and the amount due ascertained? If it is a debt, this is not the place to present it for payment, or to have its merits examined. If it is a debt, we owe more than we can ever hope to pay, for we owe the widow of every soldier who fought in the War of 1812 precisely the same amount. There is a woman in my neighborhood, the widow of as gallant a man as ever shouldered a musket. He fell in battle. She is as good in every respect as this lady, and is as poor. She is earning her daily bread by her daily labor; but if I were to introduce a bill to appropriate five or ten thousand dollars for her benefit, I should be laughed at, and my bill would not get five votes in this House. There are thousands of widows in the country just such as the one I have spoken of, but we never hear of any of these large debts to them. Sir, this is no debt. The government did not owe it to the deceased when he was alive; it could not contract it after he died. I do not wish to be rude, but I must be plain. Every man in this House knows it is not a debt. We cannot, without the grossest corruption, appropriate this money as the payment of a debt. We have not the semblance of authority to appropriate it as a charity. Mr. Speaker, I have said we have the right to give as much of our own money as we please. I am the poorest man on this floor. I cannot vote for this bill, but I will give one week's pay to the object, and if every member of Congress will do the same, it will amount to more than the bill asks."
"No, Colonel, there's no mistake. Though I live here in the backwoods and seldom go from home, I take the papers from Washington and read very carefully all the proceedings of Congress. My papers say that last winter you voted for a bill to appropriate $20,000 to some sufferers by a fire in Georgetown. Is that true?"
"Certainly it is, and I thought that was the last vote which anybody in the world would have found fault with."
"Well, Colonel, where do you find in the Constitution any authority to give away the public money in charity?"
Here was another sockdolager; for, when I began to think about it, I could not remember a thing in the Constitution that authorized it. I found I must take another tack, so I said:
"Well, my friend; I may as well own up. You have got me there. But certainly nobody will complain that a great and rich country like ours should give the insignificant sum of $20,000 to relieve its suffering women and children, particularly with a full and overflowing Treasury, and I am sure, if you had been there, you would have done just as I did."
"It is not the amount, Colonel, that I complain of; it is the principle. In the first place, the government ought to have in the Treasury no more than enough for its legitimate purposes. But that has nothing to do with the question. The power of collecting and disbursing money at pleasure is the most dangerous power that can be entrusted to man, particularly under our system of collecting revenue by a tariff, which reaches every man in the country, no matter how poor he may be, and the poorer he is the more he pays in proportion to his means. What is worse, it presses upon him without his knowledge where the weight centers, for there is not a man in the United States who can ever guess how much he pays to the government. So you see, that while you are contributing to relieve one, you are drawing it from thousands who are even worse off than he. If you had the right to give anything, the amount was simply a matter of discretion with you, and you had as much right to give $20,000,000 as $20,000. If you have the right to give to one, you have the right to give to all; and, as the Constitution neither defines charity nor stipulates the amount, you are at liberty to give to any and everything which you may believe, or profess to believe, is a charity, and to any amount you may think proper. You will very easily perceive what a wide door this would open for fraud and corruption and favoritism, on the one hand, and for robbing the people on the other. No, Colonel, Congress has no right to give charity. Individual members may give as much of their own money as they please, but they have no right to touch a dollar of the public money for that purpose. If twice as many houses had been burned in this county as in Georgetown, neither you nor any other member of Congress would have thought of appropriating a dollar for our relief. There are about two hundred and forty members of Congress. If they had shown their sympathy for the sufferers by contributing each one week's pay, it would have made over $13,000. There are plenty of wealthy men in and around Washington who could have given $20,000 without depriving themselves of even a luxury of life. The Congressmen chose to keep their own money, which, if reports be true, some of them spend not very creditably; and the people about Washington, no doubt, applauded you for relieving them from the necessity of giving by giving what was not yours to give. The people have delegated to Congress, by the Constitution, the power to do certain things. To do these, it is authorized to collect and pay moneys, and for nothing else. Everything beyond this is usurpation, and a violation of the Constitution."
Col. Crockett's response:"Well, my friend, you hit the nail upon the head when you said I had not sense enough to understand the Constitution. I intended to be guided by it, and thought I had studied it full. I have heard many speeches in Congress about the powers of Congress, but what you have said there at your plow has got more hard, sound sense in it than all the fine speeches I ever heard. If I had ever taken the view of it that you have, I would have put my head into the fire before I would have given that vote; and if you will forgive me and vote for me again, if I ever vote for another unconstitutional law I wish I may be shot."
Gentlemen, I leave this with you as my final response. Do with it as you please!
AV & Tie,
I'll just let Col. Davy Crockett answer you both. From the book, "Life of Col. David Crockett", published 1884', we find the following account.
http://www.lewrockwell.com/orig4/ellis1.html
Here is a couple of exerts more to the point at hand and also the book is available through Amazon and Barnes & Noble.
Col. Crockett speaking before the house:
What caused such a principled stand by Crockett?
The words of a wise farmer:
[FONT=Times New Roman, Times, serif]Col. Crockett's response:
Gentlemen, I leave this with you as my final response. Do with it as you please![/FONT]
AV & Tie,
I'll just let Col. Davy Crockett answer you both. From the book, "Life of Col. David Crockett", published 1884', we find the following account.
http://www.lewrockwell.com/orig4/ellis1.html
Here is a couple of exerts more to the point at hand and also the book is available through Amazon and Barnes & Noble.
Col. Crockett speaking before the house:
What caused such a principled stand by Crockett?
The words of a wise farmer:
[FONT=Times New Roman, Times, serif]Col. Crockett's response:[/FONT][FONT=Times New Roman, Times, serif]
Gentlemen, I leave this with you as my final response. Do with it as you please![/FONT]