Regarding Scientology...

[OutofDate1980]

Perhaps Romney said that for the sake of votes or perhaps he said that to look good in the eyes of a few people with power. Romney is just a man and what he says matters very little in this case. We all have our own ideas of who we want to associate with. There are some kinds of people I discriminate against.

If a tax exempt organization discriminates against fellow citizens due to being member of certain groups, race, religion, etc, then it shouldn't expect a government subsidy.

An individual can associate with anyone to their hearts desire, but if you're a casino owner who associates with organized crime members, you may lose your license to be a casino owner.

 

[A.Nonymous]

A tax exemption is not a government subsidy. Two different things.

 

[OutofDate1980]

A tax exemption is not a government subsidy. Two different things.

The difference is the terms are spelled differently, but have the same economic effect.

If a government wanted to encourage the solar power industry, a government could give a solar panel manufacturer a $10.00 tax exemption for each panel produced or send a check of $10.00 to the manufacturer for each panel produced. Both methods of encouragement produce the same tax expenditure.

One may argue which is more efficient, I would say depends on what is being encouraged.

 

[Bob Maxey]

The difference is the terms are spelled differently, but have the same economic effect.

If a government wanted to encourage the solar power industry, a government could give a solar panel manufacturer a $10.00 tax exemption for each panel produced or send a check of $10.00 to the manufacturer for each panel produced. Both methods of encouragement produce the same tax expenditure.

One may argue which is more efficient, I would say depends on what is being encouraged.

Bad idea. The government should stay out of the solar business and let the market decide. Remember Sylendra (SP) Solar?

 

[OutofDate1980]

Bad idea. The government should stay out of the solar business and let the market decide. Remember Sylendra (SP) Solar?

I gave a simple example of the similarities between a tax exemption and a subsidy, it had nothing to do with the merits of a tax exemption or subsidy for that particular industry.

This thread is somewhat related to religion, stop attempting to hijack it.

Your logic on tax exemption and subsidies supports, The government should stay out of the religion business and let the market decide. Remember priestly pedophiles ?

 

[A.Nonymous]

The difference is the terms are spelled differently, but have the same economic effect.

If a government wanted to encourage the solar power industry, a government could give a solar panel manufacturer a $10.00 tax exemption for each panel produced or send a check of $10.00 to the manufacturer for each panel produced. Both methods of encouragement produce the same tax expenditure.

One may argue which is more efficient, I would say depends on what is being encouraged.

They're still different things in a subtle, but important way. Tax exemptions are generally given to places that provide services that the government would otherwise have to provide (a food bank for the poor for example) whereas subsidies are generally given to industries and businesses the feds would want to encourage.

Take your solar power company for example. If they tax exempt the company then the company can sell $100 solar panels for pure profit. The government gets no benefit at all out of that deal. If they give a subsidy (say $10 a panel in your example), then the Acme solar company still collects taxes on those panels and the feds figure they will sell enough that they (the feds) will make some money in the deal and lining people's pockets will stimulate the economy. A tax exemption is usually, but not always, given to a non-profit like a food bank. The feds will end up having to feed those people anyway. If XYZ charity is willing to do it, the feds won't charge any taxes to them. This way, the feds essentially provide the service at no cost to them.

If you are debating whether to start a business or not, a subsidy is a much stronger incentive than a tax exemption.

 

[OutofDate1980]

...If XYZ charity is willing to do it, the feds won't charge any taxes to them. This way, the feds essentially provide the service at no cost to them. ...

Given the charities expenditures for the service equals the foregone taxes, this is a zero sum tax expenditure. Otherwise, if the government tax expenditure to provide this service is less than the foregone taxes given by the tax exemption, then this is a subsidy to said charity.

 

[ElasticNinja]

Bad idea. The government should stay out of the solar business and let the market decide. Remember Sylendra (SP) Solar?

I think the problem here is that the market is distorted because fossil fuels are so cheap (as only relatively simple extraction and refinement is required and the technology has been around for years). I think solar and other renewable research and development should be subsidised, but I'm not too sure about the products themselves. I would say tax fossil fuels heavily, provide initial capital for nuclear, fund research for renewables and see how the market sorts the rest out. But if that doesnt work the government has to intervene more of course.

 

[Bob Maxey]

If you are debating whether to start a business or not, a subsidy is a much stronger incentive than a tax exemption.

If starting a business, forget the government help. Create great products and market them to the masses. If your product succeeds, great. If not, just do not start looking for handouts; try, try again.

Most businesses in this country do not start with the hands out.

 

[OutofDate1980]

If starting a business, forget the government help. Create great products and market them to the masses. If your product succeeds, great. If not, just do not start looking for handouts; try, try again.

Most businesses in this country do not start with the hands out.

I guess there's no such thing as the Small Business Administration ?

 

[Bob Maxey]

I guess there's no such thing as the Small Business Administration ?

For gosh sakes, I guess you win. We all know the SBA just gives cash away, right?

The SBA requires repayment, usually from the business cash flow.

Go to the SBA web site and read a little something something. Unless your post was incomplete and you have more to add. I might not get what you are suggesting.

 

[OutofDate1980]

For gosh sakes, I guess you win. We all know the SBA just gives cash away, right? ...

Right, about $8 billion of taxpayer money in the last 2 years.

Sen. Olympia Snowe says SBA needs to address skyrocketing loan subsidy rate - The Business Journals

"The agency has paid more than $8 billion to cover loan guaranty claims over the past two years, up from only $1 billion in 2007. In many cases, the SBA is paying the guaranties even though lenders failed to follow agency requirements in making these loans, according to Peggy Gustafson, the agency’s inspector general."