Curbing Corporate Welfare and Government Funded Political Campaigns

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 county, city and county, city, township or other political corporation or subdivision of the State now existing, or that may be hereafter established, in aid of or to any person, association, or corporation, whether municipal or otherwise, or to pledge the credit thereof, in any manner whatever, for the payment of the liabilities of any individual, association, municipal or other corporation whatever; nor shall it have power to make any gift or authorize the making of any gift, of any public money or thing of value […] Read More