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Ryan Chittum notes that Steven Pearlstein shows how you do a corporate welfare column (on...

Ryan Chittum notes that Steven Pearlstein shows how you do a corporate welfare column (on Northrop Grumman's (NOC) relocation to the D.C. area), while Thomas Friedman shows how not to.
Comments (2)
  • Jake Huneycutt
    , contributor
    Comments (1353) | Send Message
     
    Great article by Chittum. He's absolutely right.

     

    It's a shame people are still listening to Friedman after the financial crisis --- this was the man who essentially claimed that free trade and deregulation automatically equated to nirvana-on-Earth! Look, there are lots of benefits to free trade, but when two jurisdictions have grossly unequal laws, that is not "free trade" --- it's equivalent to one jurisdiction providing a massive subsidy. And I don't see how you can argue that favorably rewarding one large and powerful corporation with favorable tax treatment, while requiring its competitors to pay the regular taxes is not a massive subsidy.

     

    This is not "free trade"; nor is it a move towards "free trade." It's mercantilism veiled under the guise of Liberalism.
    3 Mar 2010, 06:33 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (3354) | Send Message
     
    As you would expect from CJR and the Pearlstein they confuse two separate issues which need to be dealt with separately.

     

    The first is the point that it is stupid to tax corporations to begin with. The only reasonable argument to taxing a corporation is to prevent it from being used as a vehicle to accumulate cash tax free indefinitely. That argument I can understand and could buy into. Otherwise as long as it reinvests or distributes cash that is taxed elsewhere there is no reason to tax a corporation. As the US has one of the highest corporate tax rates at least bringing it down would be a step in the right direction.

     

    The second point - which is really what CJR could address if they weren't simply knee-jerk socialists - is that if you're going to go with the stupidity of taxing corporations, don't make it worse by playing the game of targetting specific corporations with tax breaks simply so they keep moving around between jurisdictions.

     

    Now I don't see either of these being fixed as long as the stupidity of the socialists is in control.
    4 Mar 2010, 04:32 PM Reply Like
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