corporate welfare


Corporate welfare is a favorite whipping post of liberals and conservatives alike. Conservatives say the feds shouldn't give corporations a helping hand but should let them live or die by the hand of the free market. Liberals cry foul at what they see as preferential treatment for corporations over, say, poor families. But what exactly is corporate welfare? And is there any rhyme or reason to the handouts industry gets from "the man"?

What is Corporate Welfare?

Corporate welfare is not an official term, but can be loosely defined as government programs that give benefits or advantages to specific companies or industries, in the form of tax breaks, loans, and grants.

Is there a rationale?

Those that support corporate welfare don't call it corporate welfare. They say instead that financial supports and incentives can sometimes help US companies compete on the global market, or allow businesses to focus on new technologies and growth-related activities rather than being bogged down with taxes and worrying about staying afloat.

What is wrong with helping our own businesses out?

Critics of corporate welfare have a couple of answers.

  • It means less money to pay for other government expenses.
  • It creates an unfair playing field - some businesses are left out of the free money given by the government.
  • When industries are subsidized, prices go higher and the consumer gets hurt.
  • It props up weak companies and industries and doesn't let the market work its magic by separating out the wheat from the chaff.

How much corporate welfare is there?

Depends on who you ask:

  • $93 billion (CATO -pdf - a conservative libertarian group) (2002)
  • $125 billion (Public Citizen - a liberal organization) (no year specified)

How do those numbers break down tax breaks, loans, subsidies, grants and tariffs?

Who knows. (At least we couldn't figure it out.) Frustratingly, the critics of corporate welfare don't spell out how they get their numbers - or even what criteria they use to say what counts as CW and what doesn't. Cato, at least, says which departments it thinks is most guilty of CW and gives some examples.

Leading Corporate Welfare Providers: (CATO) Big caveat: As we've said a few times on this page, deciding what qualifies as corporate welfare is subjective. We list Cato's breakdown only because it was the only one we could find (please tip us off to others).

  • Dept. of Agriculture: $35 billion
  • Health and Human Services: $9 billion
  • Dept. of Transportation: $11 billion

    • Example: $621 million to Amtrak
  • Dept. of Energy: 6 billion

    • Example: $670 for energy supply research
  • Housing and Urban Development: $8 billion
  • Defense: $4 billion
  • Interior: $2 billion
  • Commerce: $2 billion
  • Others: $16 billion

A little context

How much corporations pay in taxes:

- $286 billion - or 2.3% of GDP (2004) CBO (pdf)

Corporate taxes since '62 - as a % of the national economy (GDP) and of all taxes raised


source: CBO (pdf)

Where the facts are from:

Did we miss something, let some slant slip in, lose a link - or do you just have something to say? Drop a line below! In the spirit of open dialogue, cJ asks you keep it civil, keep it real and keep it focused on the message, not the messenger. See our policy page for more on what that all means.

Corporate Welfare/what is wrong with it?

1. By financing corporations, they are using this money to move their Corporation off shore so they don't have to pay taxes in this country


2. Corporation have no loyalty to their home country and are trying to do away with the middle class.


3. They are using prison labor in this country instead of hiring able working people. When you make a phone reservation for an airline. You are talking to someone in prison getting paid 97 cents an hour.


The large coporation of the world like the Carlyle Group has bought and sold every congressman in Washington. They control the goverments of the world. Think about it there is only 429 people in the leginstravive branch. 429 million is walking around change for the lobbiest!!!.

If the Chinese cash in ther bonds, this country would imediatly be own by China.


The American people are not smart enough to understant they have been sold down the drain by their elected officials.


Why would anyone spend hundreds of millions of dollors to get a job that only paid 350.000.00 a year.


people wake up and think. Don't listen to New Media people that have pretty faces but are not old enough to have expierence to what is happening. Most of them cannot remember when they didn't have remote controls for a TV. They are being use and are  dummer than a Box of rocks.

There has never been a world power that did not manufacture. When they stopped they fell. Look at england for proof.  
 | November 9, 2007 - 12:24pm