The Corporate Welfare State

Forget the Box:

Conservatives in North America identify Europe (Scandinavia in particular) with its high social safety net, health care systems and high tax rates as “welfare” states. A welfare state is a country where the government provides for the well-being of its citizens, the objective is to create greater economic equality and ensure a certain minimum standard of living.

These same people, who supposedly believe in the free market as much as they believe in Jesus, prefer to give billions in tax subsidies to oil companies, weapons manufacturers and farmers, rather than giving it to those who actually need it. After all, these companies are “job creators”, the less they pay in taxes the more jobs they create right?

I saw an interview about a week ago featuring Honeywell CEO David Cote. During the interview he was asked what he thought the effective corporate tax rate should be; Cote to no one’s surprise said zero, he argued “jobs come from companies and if we wanted to create the most effective foreign direct investment pipeline you’ve ever seen, we would have the lowest rate possible.”

Well… as it turns out, between 2008-2010 Honeywell received $1.75 billion in federal tax subsidies making their effective tax rate -0.7%, better than Mr. Cote could have dreamed.

With that kind of tax rate Honeywell must have created lots of jobs, right? During that same time period their jobs gain was -996 and managed to use loopholes in the law to fire hundreds of union workers and replace them with cheaper labour.

Continue reading here