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The Political Economy of Corporate Welfare: Industrial Revenue Bonds

Author

Listed:
  • James T. Bennett
  • Thomas J. DiLorenzo

    (George Mason University)

Abstract

Since the mid-1930s state and local governments have issued tax- exempt industrial revenue bonds (IRBs) to finance selected busi- ness enterprises. The original argument for the creation of IRB tax exemptions is the same as that for their present day continuation: Private capital markets allegedly "fail" to provide adequate financial resources to many firms, especially small businesses, and this inad- equacy reduces the economy's productive capacity and exacerbates unemployment. Each state, and nearly every major local government, now has an industrial development agency which sells IRBs. Although it is impossible to gauge accurately the total volume of IRB sales, since many are privately negotiated, the Congressional Budget Office estimated total sales to exceed $10 billion in 1981...

Suggested Citation

  • James T. Bennett & Thomas J. DiLorenzo, 1982. "The Political Economy of Corporate Welfare: Industrial Revenue Bonds," Cato Journal, Cato Journal, Cato Institute, vol. 2(2), pages 607-617, Fall.
    • Handle: RePEc:cto:journl:v:2:y:1982:i:2:p:607-617
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    File URL: http://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1982/12/cj2n2-12.pdf
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    Cited by:

    1. Jeffrey M. Kulik & Natalia Ermasova, 2018. "Tax Expenditure Limitations (TELs) and State Expenditure Structure in the USA," Public Organization Review, Springer, vol. 18(1), pages 53-69, March.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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