"I have a mind like a steel... uh... thingy." Patrick Logan's weblog.

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Thursday, June 22, 2006

Taxes and Subsidies (aka "Welfare")

Steve Dekorte conveys an item about "The Irish Economic Miracle" being attributed to low corporate taxation.

That may be. But looking from another angle, the high tech industry in Ireland is also taking advantage of the long tail of government (mostly not the Irish) investment (subsidy) in high tech in the 50's, 60's, and 70's.

The reason high tech corporations in Ireland can get away with low taxes, it seems, is because others, around the world, in past decades, *have* already been taxed.

Where would microelectronics be without the investment U.S. tax dollars made in defense and aerospace over those decades?

We may also thank those programs eventually when we as a society decide finally to decentralize electricity production through photovoltaics (among other mechanisms). Before we invest in that though, I am sure we're going to have to wrestle control away from the nuclear power lobby.

Much more investment will have to be made in the name of democracy and making each of us net producers of electricity, rather than subsidize the enrichment of the centralized few. (Running on a subsidized significant security threat (the grid) our politicians are ignoring at *our* own peril, by the way.)

Where would nuclear power have been developed without subsidies? Those corporations could not even afford insurance on the open market!

If corporations are going to benefit from the services of the commons, government subsidies (should we call it "welfare"? Horrors!), and if corporations are going to have the rights of "persons", shouldn't corporations also pay something back to the commons? "Low corporate taxes" is no more (or less) a cure-all than "high corporate taxes".

Reality is somewhere in the mix and will vary by region and industry.

1 comment:

Greg Buchholz said...

Where would microelectronics be without the investment U.S. tax dollars made in defense and aerospace over those decades?

Doesn't this analysis ignore the opportunity costs involved? For example, what if instead of spending trillions of dollars for weapons and space shuttles, we let people spend it any way they want? Would we be better off? To me, it seems likely that our defense spending has set our technological advancement (or at least a human happiness quotient) *back* several years, if not decades. Whether it was worth it (i.e. deterring the U.S.S.R.) is, of course, a different question.

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Portland, Oregon, United States
I'm usually writing from my favorite location on the planet, the pacific northwest of the u.s. I write for myself only and unless otherwise specified my posts here should not be taken as representing an official position of my employer. Contact me at my gee mail account, username patrickdlogan.