According to the Boston Globe, Lobbying for special tax treatment produced a spectacular return for Whirlpool Corp., courtesy of Congress and those who pay the bills, the American taxpayers. By investing just $1.8 million over two years in payments for Washington lobbyists, Whirlpool secured the renewal of lucrative energy tax credits for making high-efficiency appliances that it estimates will be worth a combined $120 million for 2012 and 2013. Such breaks have helped the company keep its total tax expenses below zero in recent years. The return on that lobbying investment is about 6,700 percent.
(1) Name four economic justifications for the collective's existence (i.e., the existence of government).
(2) The tax credits are for making high-efficiency appliances that are presumably good for the environment (i.e., that benefit the public in addition to the appliance consumer). Make an argument for why these subsidies are justified. Demonstrate and explain.
(3) The decisions concerning tax credits are made by elected officials. Why does the collective agreement make decisions in this manner? Explain.
(4) Are the decisions of the elected officials likely to be consistent with the collective desires? Why or why not? Explain.
(5) Why has Whirlpool Corp. contributed so much money to elected officials (i.e., what are they trying to accomplish)? Demonstrate and explain.
(6) Has the general public likely been aware of these tax credits? Why or why not? Explain.
According to the Boston Globe, Lobbying for special tax treatment produced a spectacular return for Whirlpool Corp., courtesy of Congress and those who pay the bills, the American taxpayers. By investing just $1.8 million over two years in payments for Washington lobbyists, Whirlpool secured the renewal of lucrative energy tax credits for making high-efficiency appliances that it estimates will be worth a combined $120 million for 2012 and 2013. Such breaks have helped the company keep its total tax expenses below zero in recent years. The return on that lobbying investment is about 6,700 percent.
(1) Name four economic justifications for the collective's existence (i.e., the existence of government).
(2) The tax credits are for making high-efficiency appliances that are presumably good for the environment (i.e., that benefit the public in addition to the appliance consumer). Make an argument for why these subsidies are justified. Demonstrate and explain.
(3) The decisions concerning tax credits are made by elected officials. Why does the collective agreement make decisions in this manner? Explain.
(4) Are the decisions of the elected officials likely to be consistent with the collective desires? Why or why not? Explain.
(5) Why has Whirlpool Corp. contributed so much money to elected officials (i.e., what are they trying to accomplish)? Demonstrate and explain.
(6) Has the general public likely been aware of these tax credits? Why or why not? Explain.
