One is real dollars (subsidy), one is potential dollars - tax revenue doesn't exist without actual revenue to create it. If the business bankrupts without ever

One is real dollars (subsidy), one is potential dollars - tax revenue doesn't exist without actual revenue to create it. If the business bankrupts without ever making a dime, you haven't lost anything through a tax break. If you give the business 100 million in capital and they bankrupt, you've just lit 100 million of our tax dollars on fire. To add to this, looking at the upside of the risk: If the company is successful with a subsidy or a loan, they've first got to make up the raw dollar value of the subsidy (in extra taxes) or loan (in repayments) before additional taxes become an ROI. If the company is successful with a tax break, they can start reaping rewards right away as (assuming there is some limited taxation involved), tax revenues increase with volume. However, with either option you're still gambling with public funds and policy and there are many ways to screw the public fiscally. I'm personally against using the tax code for social engineering purposes (punitive, stimulative, or otherwise), and doubly against subsidies in nearly all cases.