Conservative Congressman Explains Economics and Cronyism to the People

 

Congressman Justin Amash (R-MI) is one of the most consistent and conservative politicians serving in Congress today. He’s also made himself accountable to his constituents by explaining every vote he takes on social media — after each vote he logs onto Facebook and tells the voters how he voted and why. He’s been doing this for years and his constituents love him for it. He is truly a man of the people and he is, in my humble opinion, the best representative serving in Congress today.

Recently he took to Facebook to explain why he was against a government handout to a local Michigan business.

 

From Facebook:

Corporate welfare—whether special tax breaks, subsidies, or otherwise—inherently harms the economy and destroys jobs in Michigan. It simply shifts resources from more efficient uses to less efficient uses. And, in any case, corporate welfare is immoral. The ribbon cutting grabs headlines for those promoting a government-favored project, while economic losses and job losses are dispersed.

 

His vote against the cronyism had some folks in Michigan angry, as they believed he was voting against the interests of his constituents… but Amash, true to his convictions, explained that all cronyism is bad, even when it benefits his own district. He later went in to greater detail about the problem with subsidies and targeted tax breaks.

A plan to turn the old Steelcase pyramid in Gaines Township into a new cloud data storage facility is getting some pushback from one U.S. congressman.

U.S Rep. Justin Amash, R-Grand Rapids, posted on his Twitter account Tuesday about bills pending in the Michigan House of Representatives and Senate that would likely clear the way for cloud storage company Switch to put in a big data center on the pyramid property located off East Paris Avenue and 60th Street.

“Tell your state legislators to vote NO on cronyism and corporate welfare,” the tweet read in part.

 

From Facebook:

Subsidies and special (targeted) tax breaks are identical from an economic standpoint. In recent years, politicians have attempted (unwittingly at times) to mislead the public into believing that there is a difference. There is not. Let me explain why.

Michigan has a balanced budget requirement, so assume there is no borrowing, only receipts and expenses that must balance at the end of the fiscal year. To accurately compare the tax effect of subsidies versus special tax breaks, we must hold steady all other items, including other (nonsubsidy) government spending.

cronyismIf the State of Michigan gives out subsidies, spending goes up. To keep balance, the government offsets that higher spending with higher taxes. If the State of Michigan instead gives out special tax breaks, receipts go down. To keep balance, the government offsets those lower receipts with higher taxes elsewhere.

There is no difference economically. The difference is semantics—whether to classify the subsidy as an expense or reduction in receipts. By calling the subsidy a “tax incentive,” politicians obscure what is really happening.

And no matter what it’s called, it simply transfers resources (through higher taxes on nearly all taxpayers) from more efficient uses determined by the market to less efficient uses dictated by central planners.

If we want to encourage investment and job growth in Michigan, the economically sound approach is to lower taxes for everyone. Of course, that would take power away from the politicians, which is why most of them prefer higher taxes overall with special tax breaks for government-favored projects.

 

Thank you, Rep. Amash, for you consistent support of true conservative values. We need more like you serving in D.C.