The Case Against Corporate Subsidies

Gilbert M. Tucker

[An excerpt from the book, The Self-Supporting City. Reprinted from a publication
of the Public Revenue Education Council, St. Louis, Missouri]

This is the story of a simple but vital fact about government and taxes. It is soundly based on experience and on truths of economic science. The fact, briefly stated, is:

Government, like on individual or a business, has a natural source of income and can be self-supporting.

This fact, when understood, will show all thinking people how our present system handicaps the producers of wealth and services and destroys their natural incentives. When this fact is applied to our economic system the same amount of labor and capital will produce much more wealth-and services and give added leisure. The observable benefits will be so great that any serious threat to Free Private Enterprise by proponents of Marxism will be ended forever; and, by example, it will help roll back Marxism in other countries where it prevails.

The Problem

Men have seen the possibility of a SELF-SUPPORTING government. The following conversation between William H. Seward, Secretary of State under Lincoln, and Andrew H. Green, a distinguished citizen of New York, is taken from the book, "War-time Statesman", by Mr. Seward's son. All that Mr. Seward and Mr. Green say of New York City and the citizens of their time applies just as certainly and as fully to our government and our conditions today.

Taking up a corporation report, Mr. Seward said:

"Mr. Green, here is something which you can comprehend, but I confess I cannot Here is a great corporation which has vastly more property and resources in the way of real estate, streets, franchises, docks and wharves, buildings, rents, licenses, powers and privileges, than any other corporation can possibly have. And yet it cannot pay its own expenses. It has to ask the individual taxpayer to go down into his pockets and take out of his personal earnings a yearly contribution, in order to keep this gigantic corporation on its feet Why should not the City of New York pay its own expenses? Why should the individual taxpayer be called upon at all?"

To this Mr. Green replied:

"Mr. Seward, you are right. The problem is one that I have worked on over many years. The City of New York has given away more than enough to pay its expenses many times over. But the citizens of New York don't see it, either because they are too careless, too ignorant, or too unpatriotic, or don't want to." - From: Self-Supporting City by Gilbert Tucker.