Should the government spend money to benefit private companies? Should the government spend money to influence voters? In California, they do it all the time. There are laws specifically written to prevent this, but they are undermined by aggressive exploitation of loopholes combined with lax enforcement. And to be fair, genuine ambiguity often makes it hard to know where the lines belong. Let’s consider these one at a time.
Using Taxes to Benefit Private Companies – Corporate Welfare
Gifts of government resources to private organizations – in the form of subsidies to corporations, for example, or payments made under unlawful contracts – are illegal in California.
Article 16 Sec. 6 of the California Constitution, the “gift clause,” prohibits the giving or lending public funds to any person or entity, public or private. Here’s the actual language:
“The Legislature shall have no power to give or to lend, or to authorize the giving or lending, of the credit of the State, or of any… Read More