A news service for the people of Michigan from the Mackinac Center for Public Policy

News Story

Which Party Gives More In Taxpayer Funded Corporate Handouts?

The answer may surprise you

An ongoing debate over $16 billion worth of corporate subsidies that Michigan lawmakers have authorized since 2001 has been characterized in this way by liberals and progressives: Republicans hand out massive tax giveaways that favor big for-profit corporations over middle-income families. Democrats bemoan business subsidies in press releases, in statements to the media and to audiences at public events.

However, handing taxpayers' cash to corporations and developers is widely practiced by both parties within Michigan’s political class.

And while both have demonstrated consistent support for the practice, the side that claims to protect residents from what it calls “massive tax giveaways” – Democrats - has been even more stalwart in supporting handouts to big business.

Since 2001, the average Democrat in the Michigan Legislature has authorized $1.62 billion in business subsidies, while the average Republican approved $1.47 billion. That’s according to an analysis from the Mackinac Center for Public Policy that covers 37 public acts included on a voting record scorecard created for the research. The scorecard looks at votes that all told authorize $6 billion worth of subsidies.

The analysis covered new laws authorizing $16 billion in handouts during the period, but for various reasons not all of those could be “scored” for voting record purposes, which is to say, used to evaluate the record of individual lawmakers.

Out of 498 members of the Michigan Legislature since 2001, 154 approved giveaways worth $2 billion or more, divided equally between the parties, 77 Democrats, and 77 Republicans.

There were 217 legislators who voted “yes” on every scored business subsidy authorized during their term in office, including 122 Democrats and 95 Republicans.

Nevertheless, Democrats and the Michigan Democratic Party have portrayed themselves as the side that doesn’t favor big business over the little guy.

The Michigan Democratic Party wrote on its website, “Gov. Snyder and Republicans in Lansing and Washington have asked middle-class families to pay for their expensive handouts to corporations and the wealthy. It’s not the Michigan Way, and it’s not working.”

Chris Savage is the Washtenaw County Democratic Party chairman as well as owner of the progressive blog Eclectablog.

Savage posted earlier this year, “Rick Snyder, who has, along with this Republican colleagues in the state legislature, essentially emptied the state’s coffers by passing massive tax giveaways to corporations[,] vetoed the two bills because they would have had too much of an impact on state tax revenues.”

House Democratic Leader Tim Greimel was quoted in 2015 saying: “Four years of prioritizing big corporations over working families has left too many of our neighbors behind. While big corporations are enjoying massive tax breaks and corporate giveaways, regular people are just hoping to find a good-paying job, and our state now faces a budget deficit.”

Greimel voted for all the business subsidies bills scored during his term, authorizing corporate giveaways totaling $1.4 billion.

In an email, Greimel said his support for business subsidies depends on holding the corporation accountable for its projections.

“It depends on the context and whether there are enforceable clawback provisions that require the business entity to repay tax benefits if it doesn’t meet job creation and other targets,” Greimel said.

When Sen. Bernie Sanders, independent from Vermont, campaigned in Michigan during his presidential run in 2016, he pointed out that Democrats support corporate welfare.

“Democrats are not always right, Democrats have often supported corporate welfare,” Sanders said, according to The Washington Times. “I do not believe in corporate welfare.”

His opponent Hillary Clinton said she thought business subsidies were necessary to keep U.S. companies competitive, The Washington Times reported.