Home > Reno & Nevada Politics > The Myth Of “Corporate Welfare”

The Myth Of “Corporate Welfare”

Below is part of a conversation that I am having with Brandi Anderson, another candidate for City Council’s Ward 2 here in Reno.  One of the questions that I asked her was about what corporate welfare is, and after hearing her understanding of the issue I thought my response to her might be good for readers here to see in order to understand the matter a bit better.

This also serves as a great contrast to my conversations with Donna Graves, wherein Donna tended to avoid direct answers and remained closed about who she is and what she believes.  Brandi appears to me, for the time being (dont we all need alibi’s?), to be a candidate who is willing to demonstrate integrity and be open about who she is and what she believes. 

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Now, on the issue of “corporate welfare,” I would caution you about using this as a perjorative because it is in vogue to do so.

What some call corporate welfare, is really an anti-corporation/anti-business slogan that sounds good on the surface, but its meaning is either lost or becomes irrelevant when one actually begins looking at the term and its implications. In short, it has become a battle-cry with little meaning, except to demonize business and profit.

If all things were equal around the world, such concessions (tax breaks, mostly where the feds are concerned) would be unnecessary and would be only exercised by local and state governments to entice businesses to start or relocate to their particular venues. But things are not equal, with huge cost/wage disparities the world over requiring governments at all levels to consider tax breaks and other such deals to bring businesses to their shores and localities.

What YOU ELECTED OFFICIALS need to remember is, Reno and Nevada in general are IN COMPETITION WITH OTHER states, counties and cities for those businesses.

Therefore, you will need to figure out nice tax breaks (in this economy, make them across the board is my recommendation), infrastructure offerings and other helps to get larger businesses to relocate and new ones to start HERE.

I would encourage you to do some in-depth research on what other foreign governments do to lure businesses to their shores. They figure out incorporation schemes, wage subsidies, infrastructure (roads, utilities, business parks) and other ideas to make their particular locales the most attractive.

This is how multi-national business is conducted. I know not only because of research, but I have also been in investment banking many years ago and I am well aware of the intracacies and nuances of international finance and business.

This same motiff of competition applies to businesses that operate within the United States – so Reno is in direct competition on the national AND international level to attract businesses here. Thus, elected leaders of Reno are called upon to do things to attract those businesses, so what you and others call “corporate welfare” is actually a required part of the competition process.

One of my ideas is for Reno to take advantage of, and advocate for more/better, banking and incorporation laws to attract business headquarters and generate business startups to this state. It isnt well known, but Nevada has some fairly decent bank privacy laws that when coupled with nice tax/financial enticements can generate a substantial amount of “paper” activity, to be followed up by steady brick and mortar (including internet/e-business) entities joining Nevada, and hopefully Reno. Consequently, more people will move here, more sales taxes will be collected and if Reno City Council is smart, they will live within their means and save money for rainy days like we’re having now.

This idea just above is my own, so I ask that if you use it that it be attributed to me as I have published it on my blog and my own campaign website (yes, I am considering a future run for something). It is one of those ideas which sets me apart and the attribution piece is important – the way I’ve put it is actually a copyright issue.

Anyway… there’s my two cents on the corporate welfare matter.

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