Study finds corporate tax breaks are ‘corporate welfare’

Jan. 31, 2013

By Katy Grimes

A new study just released by the Howard Jarvis Taxpayers Foundation and the Reason Foundation found many California tax breaks given to corporations constitute corporate welfare, shows how they actually impede economic growth, and contribute to the state’s nasty political environment.

“The study examined numerous corporate tax, sales and use tax credits, tax deductions and exemptions in order to evaluate whether California tax breaks serve their intended purpose,” the press release said.

“The study reveals that while tax breaks may be intended to serve as an economic engine, they often become wasteful corporate handouts with the government attempting to pick winners and losers, often at a steep price tag to other businesses in the marketplace or ultimately, taxpayers,” the HJTA website said.

“Our study reveals what we have long suspected,” said Jon Coupal, Chairman of the Howard Jarvis Taxpayers Foundation.  “Special interests in Sacramento get special favors in the form of tax loopholes, usually at the expense of citizen taxpayers, small businesses and working class Californians.  Many of these corporate rent seekers are the same ones who finance initiatives and support legislation imposing broad-based tax hikes on everyone as long as they get to preserve their special tax treatment.”

“There are many ways to turn around the California’s fiscal and economic fortunes—cutting spending, eliminating burdensome regulations, privatizing government services, ditching boondoggles like the California high-speed rail plan, implementing real pension reform,” Adam Summers of the Reason Foundation reported.

Download the study. CalWatchdog will follow up on this very interesting study.


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  1. Hondo
    Hondo 31 January, 2013, 17:30

    Remember when Jerry Clown was for the flat tax. That’s when I supported him. I remember him standing next to knee high tax codes, they had so many pages. Now I believe his own tax code is over his head. No one can finger them out. That’s their whole point.

    Reply this comment
  2. Excellent Idea - Going Nowhere
    Excellent Idea - Going Nowhere 31 January, 2013, 19:34

    I’m sure Connie Conway is using this study right now as the basis to develop the Assembly Republican Caucus agenda.

    I remember walking around the Capitol at various times over the past 15 years and seeing all these Republican legislators with stickers saying “No Tractor Tax.” Everyone is special! Everyone deserves a tax break.

    It’s rumored that at the rate things are going with tax and regulatory exemptions and government subsidies, a man in Chino named Robert Garcia will end up shouldering the entire tax and regulatory burden of the State of California. Robert isn’t paying attention to his interests and he’s a sitting duck.

    Reply this comment
  3. CalWatchdog
    CalWatchdog Author 31 January, 2013, 19:52

    The way California is now, they’ll get rid of the tax breaks — but not balance them with equivalent tax cuts for everybody. Taxes will just keep going up and up and up.

    — John Seiler

    Reply this comment
  4. StevefromSacto
    StevefromSacto 1 February, 2013, 14:08

    Gee. John, way to rain on my parade. I was actually finding myself in agreement with Coupal and his anti-tax gang that corporate tax breaks are really corporate welfare and need to be eliminated. (That’s something I’ve been saying for years.)

    But instead of using the funds from eliminating these tax breaks to help fix our state’s broken infrastructure, improve education, restore the billions cut from social service programs during the past decade, and insure that the budget stays balanced, John repeats his usual shtick about shrinking government so he can drown it in the bathtub. Boring!

    Reply this comment
  5. Rex the Wonder Dog!
    Rex the Wonder Dog! 1 February, 2013, 15:35

    “The study reveals that while tax breaks may be intended to serve as an economic engine, they often become wasteful corporate handouts with the government attempting to pick winners and losers, often at a steep price tag to other businesses in the marketplace or ultimately, taxpayers,” the HJTA website said.
    Welfare is welfare. Of course TARP was the biggest welfare give away in American history.

    Reply this comment
  6. us citizen
    us citizen 1 February, 2013, 15:43

    I NEVER supported Moonbeam. And I never will. He’s just another ‘keep on spending lib’, that couldnt add 2 and 2 if he tried. This state is becoming the armpit of the US more and more every day.

    Reply this comment
  7. Rex the Wonder Dog!
    Rex the Wonder Dog! 2 February, 2013, 06:00

    I truly liked Clown in the 1970’s, but we had an entirely different state gov back then, and GED educated cops and ff’s did not earn more than brain surgeons.

    Saw an old 1967 episode of “Dragnet” with Jack Webb a few days ago and Friday is trying to recruit minorities and they have a scene where the pay/compensation comes up and one guy says FACTORY jobs pay more than LAPD back then, that tells us how far things have come in the last 45 years.

    Reply this comment
  8. SeeSaw
    SeeSaw 2 February, 2013, 10:24

    I would never live in the armpit of any place, US Citizen. So if you consider CA an armpit, why haven’t you moved to a state that you like?

    Reply this comment
  9. SeeSaw
    SeeSaw 2 February, 2013, 10:29

    It is very hard for a politician to be pragmatic, and Governor Brown is the best at that. Money is the “mother’s milk” of politics and the driver of such. He bears no more responsbility for that truth than any politician or supremely rich person or entity in this country. Governor Brown loves the moniker, “Moonbeam”. So you might try to hurt him, but you can’t, US Citizen.

    Reply this comment
  10. Fergy
    Fergy 6 January, 2014, 10:31

    Prop 13 is welfare for our corporate masters!

    Reply this comment

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