Government subsidy

“ At the present time the term subsidy, in place of designating as formerly a grant obtained by the Government from private interests, has come to mean a grant obtained from the Government, in aid of private enterprises which it is claimed should be encouraged by the state in the interest of the general public, as, for example, the fostering of shipbuilding and ship-using, and the cultivation and manufacture of certain commodities. ”

“ Again, what justice is there in any law that proposes government aid to the man whose product weighs eleven pounds, or measures within certain cubic inches, and denies the same relief to another citizen and taxpayer whose product necessarily exceeds these limits? If this is not special legislation bestowing subsidy or patronage on the few at the expense of the many, then what is it? ”

“ SUBSIDY. Synonyms:
A subsidy is pecuniary aid directly granted by government to an individual or commercial enterprise, or money furnished by one nation to another to aid it in carrying on war against a common enemy. A nation grants a subsidy to an ally, pays a tribute to a conqueror. An indemnity is in the nature of things limited and temporary, while a tribute might be exacted indefinitely. A [346] nation may also grant a subsidy to its own citizens as a means of promoting the public welfare; as, a subsidy to a steamship company. ”

“ This act was approved by the president, and the question at issue between the secretary of the treasury and the companies was settled by congress in favor of the latter—absolutely relieving them from the payment of any part of the $65,000,000 of subsidy bonds, except such sums as may be paid by allowing the government to retain one-half of the earnings of the roads for carrying mails, etc., which sums, as shown by the companies themselves, amount to less than one-fourth of the annual interest accruing on the bonds. The people must pay all the balance, principal and interest. ”

“ After all, the Post Office Department overhead, an item perhaps more political than economic in character, was not subject to airline control and was therefore the responsibility of the department. A subsidy is a public grant or subvention to aid an enterprise for the public convenience and not the deficit of a government department. ”

“ It is better for the ultimate security of the government in reference to the payment of its loan, as well as for the service which it may require in the transportation of its property and mails, that a hundred dollars should be spent in improving the works, than that it should receive five dollars towards the payment of its subsidy. ”

“ In the Committee of Ways and Means, it was determined that a great part of the charge of the year should be defrayed by means of an impost, which, though old in substance, was new in form. From a very early period to the middle of the seventeenth century, our Parliaments had provided for the extraordinary necessities of the government chiefly by granting subsidies. A subsidy was raised by an impost on the people of the realm in respect of their reputed estates. Landed property was the chief subject of taxation, and was assessed nominally at four shillings in the pound. ”

“ We will improve the wage and subsidy system for the employees of government offices and public institutions, and weight the system toward regions where conditions are harsh and toward special posts. We will raise the personal income tax threshold and create expense deductions for items like children's education and treatment for serious diseases, appropriately lightening burdens, and encouraging our people to increase their incomes and achieve prosperity through hard work. ”

“ General transfer payments to local governments will be increased by 9.5 percent, with the focus on increasing transfer payments for equalizing access to basic public services and stepping up subsidies for regions facing economic difficulties. ”

“ The question concerning the granting of subsidies is principally a past issue. A century ago many new enterprises in all lines of industry looked to the government for aid. In those days, when capital was scarce and when investors hesitated at risk, it was perhaps wise to grant the help of the public treasury to aid the establishment of young industries; but nowadays, when millions of capital are ready to seize every opportunity for profitable investment, it is recognized that subsidies by the general government are no longer needed. ”

“ Thus we have the strange result, that a Committee appointed to explore avenues to economy has ended by submitting a more extravagant demand than ever before. No reform is promised or even proposed. Only a challenge has been issued to public criticism and the keepers of the public purse to pay unconditionally an ever-increasing subsidy. ”

“ Excise had been established, as we have seen, during the Civil War, as a temporary expedient, destined to be permanent; and any sudden alteration of this would have led to financial confusion. The old system of subsidies, of which a certain number were voted according to the exigencies of the time, and the power of the Government to influence Parliament, had been abandoned. When the Restoration came, these subsidies were for a while resumed. ”

“ In the present state of legislation the only pretense of any existing executive power to restore at this time any part of our surplus revenues to the people by its expenditure consists in the supposition that the Secretary of the Treasury may enter the market and purchase the bonds of the Government not yet due, at a rate of premium to be agreed upon. ”

“ Hardly less significant and real, for instance, are its moral effects in rendering state administrations less self-reliant and efficient, less prudent and thrifty, by accustoming them to accepting subsidies for internal improvements from the federal coffers; to depending upon the national revenues, rather than upon their own energy and enterprise, for means of developing those resources which it should be the special province of state administration to make available and profitable. ”

“ Many people have argued for many years in favor of subsidies, which have been suggested to successive Congresses in many forms, sometimes undiguised, and sometimes disguised as payments for carrying the mails, or as a guarantee of the bonds of private corporations, or as a government loan to a private corporation. ”

“ A government that funnels your tax dollars to corporate welfare kings in the form of subsidies, bailouts, guarantees, and giveaways of valuable public assets can at least invest in promoting healthy democracy. ”

“ For every dollar saved in cutting the growth in the Federal budget, we can have an added dollar of Federal tax reduction.
We can achieve a balanced budget by 1979 if we have the courage and the wisdom to continue to reduce the growth of Federal spending.
One test of a healthy economy is a job for every American who wants to work. Government--our kind of government--cannot create that many jobs. But the Federal Government can create conditions and incentives for private business and industry to make more and more jobs. ”

“ The budgetary cost of graduated employment subsidies is only the disbursement of the subsidies to the firms employing low-wage earners, since high-pay employees are ineligible for such subsidies from the first euro earned, while an equivalent disbursement of income-tax relief in the low brackets – for example, the first $16 000 of annual income – will cost the government the loss of tax revenue on all higher earners’ first $16 000. ”

“ If Congress will appropriate $750,000 for the purpose the President names in his message, and sees to it that the money is judiciously and intelligently disbursed, it is the opinion of The Man on the Ladder that not less than $100,000,000 annually would be saved in government expenditures, or one hundred millions more of service, material, equipment, etc., delivered for the money now expended. ”

“ The King has charged me, Sir, to inform Congress, that he grants them a gratuitous subsidy to enable them to make the greatest efforts in the course of this campaign. This subsidy, amounting to six millions of livres tournois, is to be employed in the purchase of arms, ammunition, and clothing, and it is the intention of the King, that the surplus shall be at the disposal of Congress. ”

“ With rigid economy, vigorous salvage operations, and adequate revenues from taxation, a surplus of current receipts over current expenditures can be realized and should be applied to the floating debt. All branches of the Government should cooperate to see that this program is realized. I cannot overemphasize the necessity of economy in Government appropriations and expenditures and the avoidance by the Congress of practices which take money from the Treasury by indefinite or revolving fund appropriations. ”

“ Tax exemptions and general subsidies, however, are qualitatively different. Though both provide economic assistance, they do so in fundamentally different ways. A subsidy involves the direct transfer of public monies to the subsidized enterprise, and uses resources exacted from taxpayers as a whole. An exemption, on the other hand, involves no such [p653] transfer. It assists the exempted enterprise only passively, by relieving a privately funded venture of the burden of paying taxes. ”

“ Note that, in a reduced form, subsidies turn up as ‘system-wide exemption’. A subsidy is no ‘real’ subsidy if it compensates for wrong taxes.
Measures to block crowding out boil down to giving the low productivity group some guarantee for work at decent income. Such guarantees can be collective/semi-private arrangements of the Swedish/Japanese type. For the more common mixed economies, the guarantee is market-conforming, and notably consists of tax exemption. ”

“ Instead of acting upon the states, and through them upon the people of the several states, in the form of assessed quotas or contributions, the general government now acts directly upon the people themselves, in the form of taxes, duties, or excises. Now, as the chief source of revenue raised by this government is from foreign imports, and as the consumer pays the duty, it is entirely impracticable to ascertain how much of the common charge and general expenditure is contributed by any one state to the union. ”

“ Many of its proposals follow the spirit of recommendations by the Grace commission, some 2,000 citizens who compiled a report on how to cut spending growth without harming the needy or impairing any essential purpose of government. For example, the Small Business Administration has made subsidized loans to only a fraction of the small business community, while the remainder relied on commercial rate financing. Yet, at a time when small business is thriving, many of these subsidized loans are in or near default. We propose ending such subsidies for the benefit of taxpayers at large. ”

“ The appropriation of money to accomplish great national objects sanctioned by the Constitution, ought to be on a scale commensurate with our power and resources as a nation—but its expenditure ought to be conducted under the guidance of enlightened economy and strict responsibility. I am convinced that our expenses might be considerably reduced below the present standard, not only without detriment, but with positive advantage both to the government and the people. ”

“ It is believed that after the heavy expenditures required by the public service in the present year shall have been provided for, the revenues which will accrue from that or a nearly approximate rate of duty will be sufficient to defray the expenses of the Government and leave a surplus to be annually applied to the gradual payment of the national debt, leaving the proceeds of the public lands to be disposed of as Congress shall see fit. ”

“ But two considerations will serve to quiet all apprehension on this head: one is, that we are sure the resources of the community, in their full extent, will be brought into activity for the benefit of the Union; the other is, that whatever deficiences there may be, can without difficulty be supplied by loans.
The power of creating new funds upon new objects of taxation, by its own authority, would enable the National Government to borrow, as far as its necessities might require. ”

“ The existence of so large an actual and anticipated surplus should have the immediate attention of Congress, with a view to reducing the receipts of the Treasury to the needs of the Government as closely as may be. The collection of moneys not needed for public uses imposes an unnecessary burden upon our people, and the presence of so large a surplus in the public vaults is a disturbing element in the conduct of private business. ”

“ In English history it is the general term for a tax granted to the king by parliament, and so distinguished from those dues, such as the customs dues, which were raised by the royal prerogative; of these subsidies there were many varieties; such was the subsidy in excess of the customs on wool, leather, wine or cloth exported or imported by aliens, later extended to other articles and to native exporters and importers (see Tonnage and Poundage) ; there was also the subsidy which in the 14th century took the place of the old feudal levies. ”

“ In his second annual message he called the attention of congress to the large excess of the revenues of the country beyond the needs of government, and urged such a reduction as would release to the people the increasing and unnecessary surplus of national income, by such an amendment of the revenue laws as would cheapen the price of the necessaries of life and give freer entrance to such imported materials as could be manufactured by American labor into marketable commodities. ”

“ It is hardly lack of due process for the Government to regulate that which it subsidizes. ”

“ And we indicated that we needed some assistance from the federal government to stimulate the economy, to create jobs, to help us balance our budgets and preserve essential programs for the American people and avoid the need to raise taxes at the state level. ”