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>It is erroneous to call a tax break a subsidy. They are not getting any money from the government, they are simply paying less to the government. The result (
by emielbeinema 3y ago
>It is erroneous to call a tax break a subsidy. They are not getting any money from the government, they are simply paying less to the government.
The result (more money for the business/individual, less money for the government) is pretty similar, right?
The WTO definition of subsidies [1], for example, explicitly includes the kind of subsidy in which "government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits)"
[1] https://www.wto.org/english/docs_e/legal_e/24-scm.pdf https://www.wto.org/english/docs_e/legal_e/24-scm.pdf
- carlosjobim 3y agoIn a very narrow perspective, you can say that the result is the same. And yes, in general many people call tax breaks subsidies like you point out. But there's a huge difference. Example one: You give a man a fish. That to me is a gift or subsidy. Example two: You force every fisherman to give you a fish each when they come back from sea. One slips through and you don't get a fish from him. Was that a subsidy? Was that a gift from you to him, since the net result is the same? Pardon the pun.