Originally posted by Phranny
These are NOT loans. They are tax breaks. Quite a few companies in the U.S. make lots of money yet pay zero or very minimal dollars in taxes. It's welfare for the rich.
Tax breaks are not payments. They are reductions of taxes, based on a firm doing something the government wants done. BTW, individuals get tax breaks for the same reasons.
You can't give a tax break to someone who doesn't pay taxes.
How large corporate entities pay taxes is a different story. Unlike the individual sole proprietor, who pays taxes on every last dollar of profit, and can only deduct what the IRS says he can, corporate entities exist to do business, and deduct all actual expenses from before tax income.
Another BTW, all people in business are not rich. Companies routinely go bankrupt, that is they lose the money invested in them. A great many scrape by on income that a lot of factory workers would scoff at and refuse to work for.
A good example are young professionals (doctors, dentists, accountants, lawyers) who start off with a mountain of college debts, borrowing money to open an office and staff it. Folks who talk about "welfare for the rich" are simply jealous of the success of others.
Tax breaks, in general, are reduced rates, or paybacks for doing something that the government considers desirable. In many cases, these are loans, very favorable loans at low interest, and amounts that would not be made with conventional underwriting. The payback is doing things that most businessmen would not do, without the incentives. The problem with this policy, is that when things go wrong, the government's fingerprints are all over it, and thus the bailouts.