Corporate Welfare

Mitt Romney & Chris Christie: Pro-Business, Yes, But Pro-Market?


Earn 'em, don't give 'em away

Over at the Washington Examiner, Timothy P. Carney makes a crucial distinction that remains lost to too many Republicans (and their critics):

President Obama has thrown taxpayer money at General Motors and Chrysler, touted the bailout of Wall Street, extended $25 billion in export loan guarantees to Boeing, handed out billions in stimulus money to solar and wind companies, given $3 billion to car dealers and automakers through "cash for clunkers," and pushed through a health care law backed by the drug industry that forces Americans to buy private insurance.

But on Tuesday night Mitt Romney attacked Obama as anti-business. […]

"President Obama has been attacking successful businesses of every kind imaginable," was the heart of Romney's charge. Yes, Obama rants against "fat cats," and targets specific businesses and industries. But more often, the president has propped up businesses and subsidized industries. Romney has heard the tone of Obama's occasional populist rhetoric, but he has apparently missed the substance of Obama's embrace of corporate welfare. […]

A Republican who believes in free enterprise has a great opportunity, thanks to Obama's corporatism. Indeed, Romney could claim a populist mantel this election. But first Romney has to show that he understands the difference between being pro-free market and being pro-business.

Your next McCain-Palin?

One politician who clearly does not see the difference between pro-free market and pro-business is New Jersey Gov. and occasional vice presidential trial balloon Chris Christie. Here's today's New York Times:

Panasonic received $102.4 million in tax credits to move its headquarters nine miles within New Jersey. Goya Foods picked up $81.9 million in credits to build offices and a warehouse in Jersey City, two miles from its current complex. Prudential Insurance obtained $250.8 million to move a few blocks to a new tower in Newark.

Since taking office in 2010, Gov. Chris Christie has approved a record $1.57 billion in state tax breaks for dozens of New Jersey's largest companies after they pledged to add jobs. Mr. Christie has emphasized that these are prudent measures intended to help heal the state's economy, which lost more than 260,000 jobs in the recession. The companies often received the tax breaks after they threatened to move to New York or elsewhere. […]

Mr. Christie, who has portrayed himself as a fiscal conservative, has in particular used a new program, the Urban Transit Hub Tax Credit Program, for the subsidies. The program, which is intended to encourage development around nine cities, offers tax credits equal to 100 percent of some capital investments. […]

Under the program, the Christie administration has granted more than $900 million in state tax credits over 10 years to 15 companies, including Panasonic, Goya, Prudential and Campbell's Soup. The companies have promised to add 2,364 jobs, or $387,537 in tax credits per job, over the next decade.

Whole thing here.

Classic Reason piece on the issue: Daniel McGraw, in January 2006: "Giving Away the Store to Get a Store."

NEXT: Reason Writers Around Town: Shikha Dalmia on Why Bankruptcy is the Only Way to Overcome Motown's Toxic Racial Politics

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  1. Christie’s biggest value to Team Red lies in the fact that he’s got a big mouth, and relishes talking down to the media and the various left-wing mandarins that occupy the Bureaucratic-Industrial Complex in his state. It’s certainly not for any substantive fiscal policy he’s enacted.

    1. Is that an extra hand sticking out of Romney’s jacket?

  2. Christie is bad on gun rights. Do not want.

    1. ^This^
      Christie sucks on gun rights – he believes that all of New Jersey’s insane anti-gun laws ought to be enforced and remain in effect.

      1. Yes. He is making fiscal progress, but is still a statist.

      2. Maybe he’s still traumatized from that horrible encounter he had with trigger-happy thugs in the model train store.

        1. That conductor’s hat made that scene.

  3. Pro-BIG business, would be better.

    1. I’m sure that’s something that Christie would like to weigh in on. I’m sure his opinions have some heft to them.

      1. he’s a real fat guy, bwahahahaha

        1. It must be a prodigious burden to bear, living life with such a heavy heart.

          1. The sheer circumference of his commitment to limited governance is questionably stately.

            1. I bet he butters his bacon.

              Oh, that’s not how this game works?

  4. I live in New Jersey and have mixed feelings on this one. The state has been a fiscal mess for a couple of decades. What keeps NJ going is the fact that New York has always been a bigger mess that keeps a steady stream of corporate and individuals fleeing the state.

    I do disagree with it on principle. Lower corporate taxes for all would be preferable.

    However, corporate tax revenue is a much lower source than individual income and sales taxes. The logic of giving companies a break, to bring jobs to the state might make sense.…..ib/BIB.pdf

    1. So, what do you think will be the ultimate fate of your esteemed NJ Favorite Son and all around faggoty douchenozzle, Jon Corzine, speaking of decades old fiscal disasters?

      1. He’ll weasel out of it somehow and retire to a tropical island where he will sleep every night on his pile of ill-gotten gains.

      2. I thought McGreevey was the faggoty douchenozzle, Corzine the greedy one, and Christie the fat one.

        My hope is that Corzine is found liable for damages in civil court. I would love to see him financially destroyed.

        1. Corzine the greedy one

          Also the head of Goldman-Sachs, and apparently felt misplacing millions and millions of dollars was just a mere askance rounding error and just a minor, “Ooops!”

          McGreevy, by my reading was just plain stoopid, Crispy Christ Christie has great marketing PR but is still The Corpulent Jesus AFAIAC.

          Corzine == faggoty douchenozzle.

          1. McGreevy was corrupt. The FBI was following him and his staffers and recording their political payoffs. In the course of that investigation, they witnessed his high-risk gay lifestyle.

            He was lucky to escape indictment.

            1. If memory serves, McGreevey created a six-figure-salary position out of thin air for his romantic interest. That, of course, is something which would be A Bad Thing if it were for an opposite-sex romantic interest.

              1. The Israeli boyfriend was supposed to fill a new Homeland Defense position. Apparently a couple years in the Israeli Navy and a sweet ass were his qualifications. But he couldn’t qualify for a security qualifications, so the papers had a field day.

                The real crime was this:

                Rest assured, the farmer who cooperated with the FBI was duly punished and had his land stolen through eminent domain.

  5. I don’t agree that allowing companies to keep more of the money they earn rather than having it forcibly taken by the state is the same as bailing them out or propping them up. Granted, those tax breaks should be available to all, but that’s another argument.

    And please don’t take this as a defense of Christie; I think the man is an idiot.

    1. If all other businesses are paying one rate and favored companies are getting a lower rate or a rebate or credit, then it is an act of favoritism (IOW an handout) to the favored business.

      If as Drake says above “corporate tax revenue is a much lower source” (which I assume means are not a big factor in overall revenue) perhaps NJ should consider following Nevada’ example and eliminate coroprate income tax altogether.

      The rates should certainly be lower.

      1. Until our state government cuts a lot expenses (never), they will need the $2.4 Billion in corporate tax revenue.

        But it kind of makes sense to forgo some of that revenue if it will bring in more businesses and employees – who will contribute to the $10.5 billion in income taxes and $8 billion in sales taxes.

      2. We can’t make progress without favoritism. No amount of good thing — liberty or anything else — is going to be bestowed on everyone in all circumstances equally all at once, so you can always criticize any step toward your favored goal as favoritism.

        Tuition tax credits? Hey, how come the rest of us don’t get a tax break? Legalize marijuana? Why show those users favoritism vs. users of narcotics?

        If the only way to get tax credits thru the legislature is piecemeal, one business at a time, I’m in favor of it. I don’t see any state rushing to repeal taxes broadly, so this must be the way to do it. Art of the possible.

        1. But adding one exception after another is how we got a tax code that is a total mess.

          We need to cut out all the exceptions and have a much lower rate for everybody.

          1. Give me the total mess. You’ll never get there your way.

    2. I am of two minds, but I lean towards Taxes of General Applicability. The alternative is to give the government power to socially engineer and play favorites.

      If the government is to be a referee or umpire, it should have the same rules for all players.

      1. ^This.^

        Too often, states and localities use tax breaks to favor certain businesses that play along with politicians’ social agendas. I’ve pointed out before that it’s effectively a tax on political incorrectness, and no one has yet explained to me how I’m wrong.

        1. You’re wrong because you obviously hate poor people and minorities.


        2. Ever hear of the propaganda of the deed? Every time a state or locality lures in a business by giving them a tax break, they’re demonstrating that lower taxes encourage enterprise. That’s a good thing, because it will tend to generalize.

      2. I’m for more & better loopholes. The more loopholes there are, the less social engrg. there is, because eventually there’s a loophole for everything so you have great freedom of choice.

  6. It’s a race to attract the most business to your state, and the state that makes itself most attractive to all business wins that race. I’m not entirely certain tax breaks automatically equate to subsidies.

    1. I’m not entirely certain tax breaks automatically equate to subsidies.

      They don’t. One would have to assume that the aggregate owns that organization’s money, therefore a subsidy of less than expected tax revenue. Which in itself doesn’t pass the retard test.

      Now, if certain concerns are getting a much favorable rate and nepotistic treatment, then the argument could, I suppose, be made that a subsidy is taking place. I reject that argument overall. It’s Crapitalism, but if given the choice, I will begrudgingly accept Crapitalism.

  7. Reading the comments in the Washington Examiner article, it seems like that message is a hard sell

  8. I think the confusion between the free market and corporatism is the result of deliberate obfuscation on both sides of the issues. When the left attacks capitalism they fail to distinguish between corporatism and when the right advocates for capitalism they do the same. It’s not a fine distinction, but it serves the interests/agenda of both sides to confuse the issue. The left points to the hideous abuses of a corporatist state and blames the free market and then advocates for crap like Solyndra and the auto bailouts. The right extolls the virtues of the free market while also advocating for corporate welfare. This is an example of the way we can never get down to the truth of things in this country – those people whose agenda involves muddying the waters.

  9. I wouldn’t necessarily conflate ‘tax breaks’ with subsidies, even if they’re awarded according to political considerations.

    This quote from the Examiner piece is laughable in it’s naivety: “Romney has heard the tone of Obama’s occasional populist rhetoric, but he has apparently missed the substance of Obama’s embrace of corporate welfare.” News flash, it’s called playing politics, neither Romney or Obama actually believe the nonsense they spew.

  10. I don’t have a problem with what NJ is doing because every other state does the exact same thing. They would be stupid not to do it.

  11. Interesting. I play paintball. And the ads are trying to sell me paintball guns.

    1. niave facebook narcissist am surprize?

    2. Are they pitching you the same sites you already visit? Because that’s what they were doing to me on some stuff.

    3. Teh Google: It’s watching you.

  12. “Mitt”. You know what that rhymes with, right?

      1. Spit?

        1. For the job, he is fit?

        2. Hit? Bit? Nit? Lit?

          Tell us, dammit!

          1. You forgot my personal favorite: “Git”.

              1. Does anybody want a peanit.

                1. All this registration and char limits and such and still no edit feature. At least get a preview button.

  13. The issue of corporate welfare is tricky when the focus is on states because each state directly benefits from having jobs in its boundaries. This differentiates it from Federal corporate welfare which allows big companies to gain unfair advantage against smaller companies in the overall marketplace. The feds do it through subsidies, tax breaks, and regulation. When states give tax breaks, they usually don’t discriminate because their goal is to have more jobs. Although not a fan of Christie, he needs these corporations. New Jersey has one of the highest taxes, and they are broke. Something has to give. I agree with others that the breaks should be available to all, but to equate state tax breaks with federal corporate welfare is like comparing apples to oranges. Both are fruits, but there are significant differences.

    1. That’s not been my impression though. States are just as selective about their tax breaks or credits.

      Something has to give.

      People have the option of leaving so ultimately it will be the state that has the give. They can always make it easier on themselves by reducing the need to tax so much in the first place.

      I see your point about corporate welfare, but the state’s own activities aren’t all that different. A straight subsidy, Fed loan or bailout are all at other people’s expense. And a state’s special tax break also end up being at other people’s expense. The only way to avoid that is to reduce government expenditure for every favor.

      1. To be clear though, I’m not necessarily against tax breaks. I think there should be as much of it to as many as possible. But I’m always wary without reduction in government since it shifts and increases or delays the tax pressure elsewhere.

        1. I understand your point, and personally, I favor the idea of a flat tax both nationally and in the states. I think the flat tax should be on consuption though, not income/profits. My prior comment was with the thought that we are discussing New Jersey, and they are about as likely to use either of our ideas as it is likely that we will elimite the federal deficit in my lifetime.

  14. alt-alt-text: “Needs more labels.”

  15. short lecture from last month apropros to the topic

    interestingly, I never though about using the term free-prices

  16. More OT: Coast Guard to sink ship: Afraid to admit it is infested with zombies

    Dropping crews aboard the boat is too dangerous and salvaging it is too expensive, he added.

    How can having a crew board an abandoned ship be “too dangerous”? Just admit that it’s infested with zombies.

    1. zombies cant swim duh

      1. Well, my arm keeps coming unattached during butterfly, but I get by with an elementary backstroke.

      2. Shows how much you know. They can walk on the seabed.

        1. Then sink it deep, so their skulls will be crushed by the pressure.

          1. Somewhat related, the implosion is the best scene in The Abyss.

        2. Zombi 2 reference? (Zombie vs Shark!)

        3. zombies underwater = sharkbait

    2. Besides clearing the shipping lane, sinking the vessel provides the Anacapa crew “a great way for them to put their skills to use,” Wadlow said.

      “We haves us somethin’ t’shoot at, Mabel! Get out my gun n’ shot!”

      1. Coast Guard Cutter Anacapa plans to fire its 25-mm cannon at the 200-foot-long Ryou-un Maru

        Yup, too good of an opportunity to pass up.

    3. So evidently the U.S. will not tolerate unpiloted seacraft from other nations. Drones for me, but not for thee!

  17. Mr. Christie, who has portrayed himself as a fiscal conservative, has in particular used a new program, the Urban Transit Hub Tax Credit Program, for the subsidies.

    Isn’t this just spin and doublespeak? Because the article talks about tax breaks, tax credits and then subsidies within a few paragraphs as if these terms were interchangeable. A tax break only means that the producer will be robbed less – how can this be construed as a subsidy? I understand it is not fair for established businesses not to get the same breaks these new companies enjoy as a welcome basket, but how can that be construed as a “subsidy”?

    If a burglar misses my home to enter my neighbor’s, can someone say the burglar subsidized me, with a straight face? The only “straight face” I know that says things like that is Nancy Pelosi’s and only because it’s fixed in that position for all eternity.

    1. That is being very particular on language there, OM. Technically, you are right, but of what usefulness is that exactly? Is your concern that a general, broad tax cut will then be called a “subsidy”?

      1. The term “subsidy” implies that the citizens are being taxed to provide the subsidy.

        Tax credits/breaks imply only that less money is being taken from the corporation. It’s not the citizens subsidizing the industry.

        1. Unless the citizenry are under the misguided notion, nay, the delusion that they have a claim on the initial capital of the enterprise. Thus, by allowing tax breaks, it deprives said community of that revenue stream. Good old baseline budgeting theory.

      2. (Insert bureaucrat song here)

      3. Re: Randian,

        Technically, you are right, but of what usefulness is that exactly?

        Technically, semantically and logically *I’m* right, R. A subsidy is a continuous payment from one individual or individuals to another individual or individuals not contingent on production or exchange. A tax break is simply not being robbed by the government as much a before – the two concepts are NOT THE SAME.

        Again, if a robber only takes 1/2 of my wallet’s content, that’s not half a wallet subsidy from the robber to me.

        1. keep hammering this point, OM. It’s conceptual. You don’t subsidize me by letting me keep my stuff. You subsidize me when you give me someone else’s stuff.

        2. Wow, OM, I already said you were right. But thanks for yelling a whole bunch more. Then, that is what you do.

  18. I don’t see a problem with offering to cut taxes for a business that decides to locate itself in NJ.

    Granted, these taxes should be cut to zero across the board for corporations, but I don’t think there’s anything inherently wrong with saying “Hey, come to NJ, you won’t pay taxes for (x years/dollars).”

    1. How is that fair to existing competition that does not get the break?

      For example there is a craft brewery in this area that has a sweet deal with the city where they avoid taxes for x period of time, then whenever that time expires they threaten to pack up and leave if it is not extended.
      Meanwhile their competition isn’t getting the same deal.
      As a result the one with the tax break is making money hand over fist, while the competition is just getting by.

      Crony capitalism aka crapitalism.

      1. How is that fair to existing competition that does not get the break?

        I didn’t say that it was fair to existing competition; however, there is an argument to be made for it. “Well, existing competition can threaten to pack up and leave too.”

        I don’t really want to make that argument, and like I said, I’d rather tax cuts for all corporations. I just don’t see anything wrong with letting corporations keep their money.

      2. If their competition is smart, they will make the same deal. All they have to do is make the same threat to pack up & leave, or not move in to begin with. I see nothing but good coming from this.

        1. It’s not really worth getting into that part of the argument though; the state isn’t going to care about the small business with less than 50 employees no matter what your threats are.

          Still, I’d argue that any tax relief is better than none.

        2. The nearest competition is too small to be noticed.
          That and the owner of the one that gets the sweet deals is very politically connected.

          1. Then the other one’s a cheapskate who needs to pay bigger bribes.

    2. For extra lulz, see if you can find pols or rentseekers who want to tax Amazon, because its “not fair”, the “level playing field”, etc., and who also support giving tax breaks to businesses that relocate to their burg.

      1. For extra lulz, see if you can find pols or rentseekers who want to tax Amazon, because its “not fair”, the “level playing field”, etc.

        Too easy of a task. Can I search for the ones that don’t want to tax Amazon et al? I think the list will be significantly shorter.

  19. No politician wants to disentangle pro-market from pro-business. Dems don’t want to, because they love to paint all free-market types as being in the pocket of Big Business. And Reps don’t want to, because businesses make donations, whereas the market does not.

  20. It’s kinda like how your apartment complex won’t cut you a break on your rent, while simultaneously running a $100 off special for signing a new lease.

    1. Of course, there is this pesky thing called “incentive”.

      1. Don’t get me wrong, I think incentive’s are a good thing. I just think it’s horribly short sighted to only try to incentivize new customers and giving old customers the shaft.

  21. I see that photo of Mittens holding up some of that wealth he created, and it makes me want to vote for him.

    I’m not saying I will, but it has the opposite effect on me that I think whoever originally dug up that photo intended.

  22. Christie is backing and spearheading corporate welfare at its finest – this is the 1%!!!

    Prudential pulled in $3.5 billion in profits in 2011 and has more than $870 billion in assets and now has the nerve to take $250 million in tax credits from a limited amount available, that are supposed to be for out-of-state companies that locate in New jersey and bring new jobs! They can afford to pay for their own new office space!!!

    Christie needs to stop tax breaks for billionaires at the expense for the taxpayers!!

    1. Christie needs to stop tax breaks for everybody. The more taxation hurts, the more people will oppose profligate spending by governmental agencies.

  23. The companies often received the tax breaks after they threatened to move to New York or elsewhere

    Sounds like the companies are basically shaking down the government of NJ for special tax breaks. While it would be nice if Christie had the backbone to tell them to fuck off, while simultaneously lowering the overal corporate income tax rate and creating a level playing filed for all, that’s probably asking too much from a typical politician.

    Besides, if he did that the companies would probably still go elsewhere. It’s not so much the tax breaks that they want as the competitive advantage over smaller in-state competitors that’s the key.

    1. ^^THIS^^

  24. Isn’t Reason a little hypocritical with this? You jeered last year when congress killed some HSA tax breaks for OTC medications. How is that not like these tax credits? It’s all just loopholes favoring one group over another.

    1. Reason is not an individual.

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