Many argue for and against corporate welfare. I support it…mainly because it’s already happening and too many corporations are receiving state and federal assistance through vast subsidies and tax breaks, even though these companies are very profitable. Much of this welfare is also unregulated and comes with little to no strings attached. So if it’s going to happen anyway…it needs to be responsibly regulated.
Currently, there are too many profitable large corporations and businesses that received welfare assistance through tax breaks, subsidies, and bailouts. Yet none of the CEOs or other members of these corporations’ upper management have ever been held accountable for the irresponsible decisions that inspired the massive corporate welfare payoffs in the first place. While mismanagement accountability is a topic for another time, what follows is an option to regulate corporate welfare.
So let’s model corporate welfare after another program that works: TANF. TANF stands for Temporary Aid for Needy Families.
According to The American Enterprise Institute, as recently as September 2015, TANF has been a resounding success over the last 2 decades. It “helped raise the labor force participation of never-married mothers from 59.5 percent in 1995 to 73.8 percent in 2001 and reduce their poverty rate from 51 percent to 38.5 percent” and “has been a rare bright spot in US anti-poverty policy.”
So for sake of conversation, lets model our Corporate Welfare Act, in very general terms, after TANF.
TANF allows a maximum of five years of financial assistance. Large corporations and businesses should be limited to the same. Thus, if a corporation doing business in the United States is receiving a welfare tax break or subsidy, it would be subjected to the same five year limitation, with no option for extension. We live in a capitalist economy, if a corporation cannot survive after five years of subsidy, another should rise to take its place.
Further, any corporation that receives a welfare subsidy or tax break should be required to be 100% transparent and open their books and other records to government oversight. TANF requires this already…families are required to provide banking and financial information before receiving any government assistance and while receiving welfare assistance families are required to provide updated financial information on demand. Corporations should be required to do the same.
Additionally, any corporation or large business receiving welfare should be barred from receiving any subsidy or tax break if their global profits are beyond a certain point. TANF already requires this. TANF bars assistance to families who earn over a certain sum of income…the same should be required of corporations. If the corporation is profitable like Boeing or Microsoft, it doesn’t need any welfare tax breaks or subsidies. This would include loans and gifts.
Any corporation receiving welfare tax breaks or subsidies would be required to employ at least 51% of their global workforce from United States citizens residing in any of the 50 United States. These workers would be required to be permanent employees, not contractors or temporary workers.
Corporations receiving welfare assistance would be required to limit CEO and upper level management compensation to ten times the amount of their lowest paid workers…this would include the value of any stock options and deferred compensation.
State and Federal Legislatures would be barred from enacting laws that allowed tax breaks and other subsidies without full payback and accountability written in.
Finally, when the law is enacted…all current subsidies and tax breaks immediately cease…requiring corporations to pay their fair share.
Isn’t time we take steps to stop allowing profitable big businesses and multinational corporations, who get preferred status through corporate welfare tax breaks and subsidies, to offshore American jobs? They need to be regulated responsibly, this is one way to do it.