Democrat Gubernatorial Candidate's Support For Corporate Welfare

Capitol Confidential ^ | 2/17/2014 | Michael LaFaive

[MichCapCon]

Mark Schauer, Democratic candidate for governor, is railing against tax breaks for businesses.

In a recent ad Schauer alleges that Gov. Rick Snyder cut education spending and used the revenue "to give tax breaks to businesses even if they send jobs overseas." Schauer's spokesperson, Zack Pohl, reiterated the claim in a recent Detroit Free Press article: "Snyder chose not to find new revenue for education because he used that money to pay for his huge $1.8 billion corporate tax break." The media has recently given more scrutiny to this narrative.

Yet over the past decade Schauer himself was one of the leading proponents of tax breaks for business — at least for particular firms selected by the political appointees on the board of the Michigan Economic Growth Authority. Ironically, it was Schauer's opponent — incumbent Gov. Snyder — who ended this tax break program, albeit replacing it with a smaller subsidy program.

There is an obvious difference here in economic development visions. The MEGA program offered politically well-connected firms special favors. Broad-based tax cuts for businesses take a more "fair field and no favors" approach to development.

In the audio posted below you can hear Schauer, then a state senator, back in 2003 expressing concern about a looming sunset of the MEGA targeted tax break program. (Politicians from both parties voted with near unanimous majorities voted to extend it.)

From its beginning and up to the point these 2003 hearings were held, MEGA had offered up to $1.5 billion in state tax breaks to businesses. These special deals often came with other state goodies and were contingent on local governments providing additional special treatment.

Two Mackinac Center for Public Policy studies found that MEGA failed to create the jobs it had promised. The first in 2005 found no new net jobs from the program, and the second found the program may have actually destroyed more manufacturing jobs than it created.

This wasn't the only corporate welfare program supported by Schauer — and he had lots of company on the Republican side of the aisle, too. See Schauer's record of voting on corporate welfare bills introduced and supported, including flat-out cash subsidies, at MichiganVotes.org.

Corporate welfare is a bipartisan bad habit. Politicians in glass houses shouldn't throw stones.

[PGalt]

Another very good article by Michael LaFaive. Thanks for posting.

“Corporate welfare is a bipartisan bad habit.”

Crony socialism/fascism is plunder of the republic.

Victims of Lawful Plunder

Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter — by peaceful or revolutionary means — into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.

Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws! Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess.) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.

It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution — some for their evilness, and some for their lack of understanding.

The Results of Legal Plunder

It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.

/Bastiat

[GeronL]

We need to get rid of all forms of corporate welfare, especially the “green” crap