Liberal Myth #1: Tax Breaks to Corporations Are Subsidies.

The first thing you need to know about this is that most liberals view the government (or the state) as the sole source of wealth.  This is contrary to the philosophy of the Founding Fathers, who believed that, in essence, individuals are the source of all property.  We all identify things as food, clothing, and land as property, as these are tangible assets.  Money too (in fact, all wealth) is considered property.

Many of the Founding Fathers – especially the architects of documents like the Declaration of Independance, and the Constitution – were devotees to the writings of John Locke.  Guys like Jefferson, Madison, Mason, Washington, Adams, and Franklin were heavily influenced by this specific Enlightenment-era philosopher and writer.  In fact the line, “Life, Liberty, and Pursuit of Happiness”, was lifted from Locke’s statement:

… Man being born, as has been proved, with a title to perfect freedom, and an uncontrolled enjoyment of all the rights and privileges of the law of nature, equally with any other man, or number of men in the world, hath by nature a power, not only to preserve his property, that is, his life, liberty and estate, against the injuries and attempts of other men…

The statements that Jefferson made were so similar to those of Locke, that the charge of plagiarism was leveled.

It should also be noted that Thomas Jefferson was so enamored of John Locke, that he considered him one of the three greatest influences in his life, next to Newton, and Bacon.

Locke also stated that, “Government has no other end, but the preservation of property.”  So, it’s crystal clear that there is a strong line drawn from the Founding Fathers, to John Locke, to the notion that all property isn’t the sole possession of the state, but of the individual.  Furthermore, Locke clearly believes that it is government’s job to guarantee the sacred right of individual property ownership.

In Locke’s time, property was considered the ownership of monarchs, which made his ideas radical.  In more recent times, a “new” concept of property ownership has appeared.

The theory of the Communists may be summed up in the single sentence: Abolition of private property.

Or so stated Marx and Engels in the Communist Manifesto.  Given that your average liberal would shudder at the notion of a monarchy, it’s real clear where their viewpoint of property is derived: Socialism.

Say that to a liberal, and you’d probably watch their head explode.  But it is in fact true.  modern-day liberalism is steeped in socialist thought.  Which is the reason why they consider tax breaks “subsidies”.

How?

Again, it goes to their notion that all property and wealth is derived from the State.  Wealth, as I’ve explained, is property – pure and simple.  All money is backed by some form of property, whether it be gold or accumulated goods.  Thus, when a government imposes a tax, it dips into that well of private property to fund its operations.

True subsidies are paid out after tax revenue is collected, not before.  There are lots of things that aren’t taxed (yet), but because they aren’t taxed it does not mean that the use of these items are subsidized.  The government, in the view of the Founding Fathers (the people that created the present system of government in the first place), is NOT the sole owner of wealth.  So, it can pick-and-choose what wealth it needs to create revenue.

Not that the federal government is absent some sort of wealth.  The federal government holds a LOT of wealth.  They own property.  They also sell this property off to private interests, or lease it out to private interests as a means to generate revenue without direct taxation.  There are also laws requiring the government to pay a property-owner the “fair” value of whatever property they seize for its purposes.  If the state owned everything, there would be no need for compensation…and no need for taxes as well.  Everything you have would be provided by the state, in one form or another.

Furthermore, subsidies are paid out by the government with no expectation of it realizing any sort of return.  Low-income families have housing subsidies, but there is no expectation on these debtors to pay  this money back should they somehow strike it rich.  This differentiates a subsidy from a loan.  Traditionally, when federal/state/local governments “subsidize” businesses (as in the famous case of the Chrysler bail-out back in the 1970s), the “subsidy” was floated as a loan, which required repayment with interest.

Finally, and I think that this is important to remember, corporations are usually given tax breaks because the state that floats the break is making the calculation that whatever they lose by not collecting on corporate wealth, they gain by individual income taxes, payroll taxes, and the like.  So, somewhere, someone is paying more into the government.

So, tax-breaks are NOT subsidies.  And when your liberal friends claim that the federal government subsidizes businesses via tax breaks or tax cuts, they are either lying through their teeth, or are just fundamentally ignorant of the basic principles upon which this country was founded.

And, they’re espousing Marxist dogma, was has been a proven disaster time and time again.

This entry can also be found on the Liberal Myths page.

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