In this excellent Heartland Institute podcast, National Taxpayers’ Union Vice President Pete Sepp discusses the problem of the corporate welfare wolf in the clothing of economic development. They discuss everything from real estate development to subsidizing sports stadiums:
Local officials in thousands of communities around the country love to do “economic development” that doles out tax breaks, taxpayer-backed loans and other “incentives” to attract specific businesses. Pete Sepp of the National Taxpayers Union says it’s really corporate welfare that sends the message..
Peter Overby for NPR created a segment focused on the all the special deals and tax breaks that make their way into federal legislation, even without officially being able to use earmarks anymore:
Congress likes to say it no longer does earmarks, the provisions that direct federal dollars to serve local interests or campaign supporters. And though that may be true, it’s also a fact that targeted provisions are still useful in moving legislation — even critical legislation like the bill that pulled Washington back from the fiscal cliff last month.
..Those people have votes the leadership needs. So their interest gets added to the bill.
“That’s usually called an engine,” he says. “It passes legislation.”
That nice old metaphor comes from the age of railroads. Here, one big engine would be tax extenders — special tax breaks that Congress gives to different industries. They amount to about one-third of the bill.
The Kojo Nnamdi radio show had an interesting segment recently about state and local attempts to subsidize businesses, and the guests of the program (including economist Matt Mitchell) discuss the costs and benefits.