Why Huge Tax Breaks for Corporations?

Posted on December 4, 2021

Why Huge Tax Breaks for Corporations?

While there have been talks of increasing taxes on taxpayers, businesses large and small are getting tax breaks that run into millions of dollars. States are getting competitive about getting the most businesses on their turf to increase employment, and businesses are choosing states that give them most incentives. Even companies whose profits go into billions of dollars annually get tax breaks worth billions. Problem intensifies when companies are bailed out.

Is the government losing much and gaining little? That is a question that hasn’t reached Washington yet. Considering that businesses employ only as many people as they need, they are not creating jobs, but meeting demand. If the demand is less, they will need less people to meet it. That is why to keep companies profitable becomes a concern of the government. A for-profit business will try to minimize expenditures and increase profit, a strategy that is not helpful for employees.

Even if businesses bring in more jobs, the government is losing much money to them. If bailouts are added, it is the American taxpayers’ money that gets spent to keep companies profitable. 20 percent of state and local budgets come from federal spending, but the issue of state and local incentives still remains buried. States are losing billions in taxes every year due to incentives.

After the expiration of many tax breaks, an average taxpayer will be paying more taxes starting next year. The rich might also be paying more taxes. But tax breaks for corporations will continue because lawmakers think the country needs it to compete globally.

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