Corporations’ Massive Tax Breaks Hurting the Economy

Last updated on December 3, 2021

Businesses both large and small have been getting tax breaks from the government. States have become competitive in getting corporations to choose them. Job creation is the reward for the incentives businesses receive, but is that an advantageous deal? Considering bailouts and massive tax breaks to big corporations, it doesn’t look beneficial, at least from the taxpayer’s point of view.

Millions of dollars as incentives are being awarded to corporations, Hollywood, banks, hotels even when states are facing a deficit. Many businesses are bailed out before they become profitable again. It is the taxpayers and the state that loses that money that goes to the establishment of businesses. The bargain is not a good one, as the return is little.

There are many kinds of incentives provided by the states including sales tax breaks, income tax credits, exemptions, free service, property tax abatement and so on. If you add up the amount given as incentives, they touch billions. This money could have been used for other government spending.

Large multinationals such as Apple and HP do not need to bargain, they call the shots. The states cannot but accept their terms. The companies are making billions in profit, but they ask for tax incentives and get it. Creating jobs is what a company will do if it is expanding. No company will keep employees when it has no work for them. That is the plain calculation that goes behind job creation. With the country looks straight ahead at the fiscal cliff, time is ripe to consider and discuss tax breaks to corporations.