Bailouts

I don't know how to feel about all this bailing out of corporations. Don't we have a free market system? If so then these companies should be allowed to fail, fall flat on their collective keisters, and hard. But, since we don't have a true free market system, we have a mix that includes socialism for the rich and corporate welfare.

How many people know that corporations are getting hundreds of millions of our tax dollars each year, from federal and state funds, for no other reason than they exist. Sometimes they beg the government for money to market their product or to help keep the price low. Who does it benefit? Not me! I am paying for the same product twice essentially. Once at the register and once when my tax dollars are handed over without regulation, restriction or any pay back terms.

Here are some examples:

• Oil companies, with profits of nearly $150 billion in 2007, were getting about 20 - 25% of their profits in the form of subsidies from the government - around $30 billion. Why? They not only lobby hard but they also have a lot of friends in government, both state and federal, and we the taxpayer foot the bill. I would rather pay a fairer price, $4 at the pump, and see the oil companies make less profit and no double dipping - subsidies/corporate welfare.
• A big company like Wal-Mart will go into an area, get local government to pay for the land and construction of a new store, pay no income taxes - although they collect it from employees, and get a tax break on sales tax - which they also hold onto. Essentially they get are getting paid to move into an area and then pay no taxes, even though they collect them from employees or on sales. The pitch is usually they are bringing jobs to the area. When they close up shop the building can not be reoccupied by another store, it has to be left empty or torn down.
• A number of corporations will pit two or more cities against each other in order to extort money. A company will claim they are looking for a new place to move to, ask for tax breaks, up front money and so forth. Many cities are more than willing to bring enticements to the bargaining table, even grants by handing over money without any requirements. Then the company stays put where they are currently with a pocket full of new money.

In my next post I'll provide some links to books or websites to help you better understand how corporations are double dipping into our pockets and usually not paying their fair share of taxes. Until then, do a search on Google, you'll be surprised at how wide spread the abuse is.