(Janine Hansen) – Why is the government subsidizing millionaire corporations at the expense of the poor and middle class? The Governor is already being sued for giving million dollar subsidies to Elon Musk’s SolarCity. Now he plans to subsidize Elon Musk’s Tesla to make cars for millionaires while Nevada’s businesses and taxpayers foot the bill. Why?
The Governor and the Legislature already violated the trust of the people by twice refusing to sunset the business tax which would have benefited all Nevada businesses equally and create jobs. Now the Governor is asking the Legislature to violate the Nevada Constitution and undermine the rule of law by giving more money to Californian Elon Musk’s Tesla. Why?
Has government now become the arbitrator and subsidizer of “special” corporations and business that are chosen to flourish while all other businesses are taxed to pay for the chosen? The Tesla deal undermines the rule of law.
Yes, the promise of a company investing up to $5 billion in Nevada is very appealing. But betting hundreds of millions of taxpayer dollars on an unproven enterprise is extremely risky.
Just today, for example, the Wall Street Journal reported that, surprising the conventional wisdom, demand for electric and hybrid cars is declining, driven down by multiple factors. And, of course, in just the last few years, taxpayers lost hundreds of millions of dollars after federal politicians gave handouts to green-energy companies such as Solyndra and Abound Solar.
Government subsidies make taxpayers assume the risks of business ventures while being deprived of the financial rewards that willing stockholders receive for bearing those risks.
Even when government-subsidized businesses do return some nominal profits, hidden behind those profits are always the unseen opportunity costs imposed on everyone else.
At root, it is fundamentally unjust for government to use its powers to financially reward the “connected” at the expense of those not so well connected. This is why Nevada’s founders expressly prohibited state subsidies to private companies in
Article 8, Section 9 of Nevada’s Constitution. It reads:
“The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.”
Thus, to use government to designate a few financial winners — and many financial losers —undermines the rule of law.
What is needed is a single set of rules for entrepreneurs: a common law. To breach that principle — especially when calling a special legislative session for the benefit of one company — is to foster a system where the politically powerful are even more advantaged over everyone else.
That is not the America which has prospered in a free-market economy. That is a country where companies will increasingly ignore consumers and increasingly shift their focus to pleasing politicians.
(Janine Hansen is director of Nevada Families for Freedom)