From www.lp.org

The cost of corporate welfare is staggering. All told, there are more than 100 corporate welfare programs on the books, costing taxpayers a whopping $87 billion per year.

That's equal to the combined annual income tax paid by 60 million individuals and families, according to Public Citizen.

And according to the Cato Institute, if corporate handouts were eliminated, the federal government could provide U.S. taxpayers with an annual tax cut twice as large as the tax rebate checks mailed out in 2001.

Corporate welfare has drawn the wrath of left, right, and libertarian.

It's been called "stealing from the poor to give to the rich" by the Cato Institute.

It's been called "using tax dollars to help the rich get richer," by Fairness & Accuracy In Reporting (FAIR) writer Norman Solomon.

And it has turned the federal government into "America's biggest Sugar Daddy," according to Time magazine, and "turned politicians into bribery specialists and smart business people into con artists."

So why does it continue? Because it's a good deal for politicians and their corporate friends.

Politicians guarantee themselves a steady stream of campaign contributions from grateful business owners, while touting the alleged economic "benefits" and job-creation powers of the business subsidies they support.

And corporations get wheelbarrels of cash -- courtesy of taxpayers.

That's why politicians in both major parties are unwilling to upset the corporate welfare gravy train.

When Democratic President Bill Clinton was in office, for example, he proposed an annual average increase of 10% for corporate welfare programs.

Favorite programs of the Clinton Administration included $3 million for whiskey exporters such as Jim Beam and Seagrams, and $3 million to the California Raisin Board to run its "dancing raisin" ads. (end of quote)

You know, everytime I attack welfare for individuals I have someone ask me why I don't attack corporate welfare. The reason why is because it would be off topic. Actually corporate welfare, or more correctly speaking government acting in favor of monied interests, was quite possibly the founding father'ss greatest fear. The history of governments, up into the colonial era and not much changed since, was for government to act in the interests of those with money and/or power. Subsidies and tariffs and direct payments are all easily recognized as corporate welfare. What is seldom recognized as corporate welfare is regulations and government agencies that create barriers to entry, i.e. the FDA and DOT.

What government welfare to companies does is restrict the proper flow of capital. It also protects corporations currently in business while throwing up obstacles in the path of potential newcomers. Corporate welfare literally kills people. The obstacles the FDA throws in the path of potential drugs killed tens of thousands of AIDS sufferers in the '80's. The deaths due to drugs that have never been developed, due to the FDA, are unmeasurable.

I oppose all corporate welfare, does anyone agree with me?

I love it when I learn new things everyday.

I didn't even know we HAD corporate welfare!

I'm a bit confused about when this welfare is handed out. Is it true that companies that are doing well receive tax money? If thats true, its down right diabolical!

I can understand the government giving money to industries that might potential go under and leave us without an industry. For example, after 9/11, if we didn't give the airplane companies money they surely would have gone under leaving us without any way to travel!

I'm a bit more angry that neither the democrats or republicans have even talked about this issue. I hadn't realized something (seemingly) so crooked has gone by both democrats and republicans without serious debate. But if it benefits them both, I understand why they're silent.

*4. Corporate welfare fosters an incestuous relationship between business and government. All too often, the firms and industries that contribute the most to political campaign coffers are the largest recipients of government handouts.

Becominghuman, here's a good link which offers a brief explaination of corporate welfare:Cato Handbook for Congress on corporate welfare

That is a great link. Unfortunately, the Cato Institute, as does nearly everyone else, fails to recognize that corporate welfare is instilled in many government programs that someone who took a casual look would think favors the consumer and/or labor.

The worst corporate welfare program is the FDA.

I'm for ending it. Most businesses should survive or die based on their own merits, and not have the support of Uncle Sam's deep pockets. Likewise, the government should not interfere so much in the natural competition among competitors. Sometimes it isn't unfair that one company beats out all the others, instead it is just natural survival of the fittest.
It is a waste of the taxpayers money to keep some companies alive just to give the appearance of competition. About 20 years ago I watched U&I Sugar get millions of dollars from the LDS church when it was already clear that they could not compete with C&H. It was many church member donated dollars that got thrown away, in this instance.
The only possible exceptions might be companies that exclusively build weapons for the military, and they probably would get a monopoly of sorts to guarantee the continued existence of their core staffing. They would farm out work as needed when they get more contracts than they can handle on their own, pretty much what they do now anyway.
I am sure that smarter people than me can work this out, but I am also doubtful that the existing special interests will go along with it.

America seems to try and fight off monopolies for what reason, we already allow business authority in government and peoples lives, we are always heading that way.
The new owners will maybe take on the casualties or the workers of the previous tyrant or country.

Then there is dealing with global companies, and that one calls for nationalism in a free market world, ouch!

Then the WTO and such come along, and everyone hates them

So i guess its growing pains, i just don’t know what we are growing to, peace or personal happiness, some dominants culture. It all reflects, so i don’t think i am off topic.

Just with how welfare should be more in touch with the individuals, i think corporate welfare should be the same, the government should be able to know why this company needs the money, and the information is very imortant I would think. Maybe we can catch some guy trying to use the company to buy a 300 million dollar mansion in Montana.

The airlines was one of the most egregious examples of corporate rip off of the
US citizen probably in the last 100years- I have a e-mail friend that works in the industry, he has described in great detail how they rip us off almost daily- I will e-mail him to send me the stuff again.

That being said, it is very difficult to seperate a business stimulis package that actually helps the economy and gets "bang for the buck" and corporate welfare. Any money to ADM corporation is probably welfare. SB loans are one of the best way to make MORE taxpayers and MORE revenue. The poeple who recieve corporate welfare know this basic problem, and exploit it, making it very difficult to seperate one from the other. It is like regular welfare, the great majority of the recipients use it for a short time, are in great need, and actually the country is better off because of the benefit, the problem is, the corporations take bigger bites than the welfare rip off!

I can't believe I'm actually typing this, but...yes, Hugo...I agree with you. This was actually one of the many reasons I voted for Nader in 2000. If anyone has ever heard or read a Nader speech, you know how he goes on and on about corporate welfare and its costs to the people. I believe it should be ended completely.

I'm in agreement with Hugo as well; although I have my own motives. "Corporate Welfare" is one of the chief impediments to the development of viable alternative fuel and energy sources by subsidizing the oil and gas industries and artificially lowering the cost to provide these fuels as power. (Promoting waste and preventing competition.)

There is something that we should be clear on though. Yes the government does provide hand-outs to corporate interests; but these same companies would just as soon pack up their bags and head the the Caicos Islands if the full weight of current taxation was brought against them.

Could you explain how this is corporate welfare, and not over-regulation? Who's getting the handout here?

The biggest example of corporate welfare is not the FDA, but a corporate tax code with regressive effects. Corporations are given many of the same rights as people, but taxed at about one-fifth the rate. Many of the very largest corporations pay no tax whatsoever. There's a whole profession devoted to hiding profits. And yet...if anyone suggests fixing corporate taxes, they're warned that it would create a hostile environment and businesses would flee elsewhere. All of those other supposed US advantages that are touted in every context - availability of talent, network effects, etc. - are immediately forgotten in the rush to protect this particular kind of corporate welfare.

The very same people who oppose social spending would say that reduced taxes aren't actually the same as welfare. Five minutes later they'll be defending billion-dollar contracts given to presidential cronies without competitive bidding; sometimes they'll cite national security, other times they won't even try that hard. When someone claims to support solving a problem, and yet their solution seems to represent just about the least effective possible set of approaches and priorities, one can only wonder. If we're to stop "restricting the proper flow of capital" (Hugo's words) shouldn't there be ten threads like this to one about poor individuals, instead of vice versa?

Yes, I oppose corporate welfare. Not only that, but I make it a priority to oppose it, before I start complaining about other, lesser problems.

When barriers to entry are imposed on an industry existing corporations benefit by the fact they have less competition. In this case the welfare benefit is paid by the consumer. These barriers to entry can consist of regulations, licensing requirements and educational requirements to name a few.

The "handout" is excessive profits to existing corporations due to the actions of government.

If our expenditures for the military in the Middle East are, as some people claim, all about oil then our expenditures on corporate welfare for the oil industry make the costs of direct corporate welfare payments to businesses pale in comparison. While I don't totally agree with the "it's all about oil" philosophy this would be an excellent example of corporate welfare, in my admittedly broad use of the term.

How many people who have stated they are against corporate welfare are willing to put their vote where their mouth is?

I am against corporate welfare. This and other issues means I rarely vote for incumbents. It will be near impossible to support any Democrat or Republican candidates if you make this one of the issues upon which you make your voting decisions.

Now, how many of you are REALLY against corporate welfare?

(No need for you to answer, Hugo. )

The classical liberal recognized that wherever there was government monied interests would have a hold on it. The classical liberal solution was to limit government.

As bad as the Federal corporate welfare is, though, the state and local funding of major corporations is just as bad, if not worse, as far as the average taxpayer is concerned.

•Low interest loans - taxpayer-guaranteed financing usually at lower interest rates and longer terms than conventional financing.

•Tax abatements - elimination or reduction of assessments or tax rate over a period of time.

•Enterprise Zones - tax credits for development in disadvantaged communities. In one Maryland County, an enterprise zone with no inhabitants was created in the middle of an affluent community to give a company this tax break.

•Direct grants - for example, the Maryland Governor has a "Sunshine Fund" that allows him to put money into an economic development project.

•Use of eminent domain to secure the land and access routes without cost, at the cost of current tax paying residents and businesses.

•Waived or reduced sales tax on materials, including duties on imported materials.

•Free or reduced-cost land preparation – for example, the state or county might clear or grade the land for free, or provide free or reduced cost work on nearby roads, highways, rail or utility connections, or harbor or dock facilities. The city might provide free or reduced cost water and sewage hook-ups.

•Free or subsidized environmental restoration. If land is suspected of contamination or was an abandoned mine, the government might bear the cost of assessment and testing, and sometimes even clean up.

•Free or reduced cost services -trash, fire, or security

•Training grants or subsidies – for example the job site is used for on-the-job training. And this does not have to mean training for low income workers. Just that they are training on-site for jobs that they have available.

•Low-cost workers. For example, Louisiana trained hundreds of former welfare recipients, low-income youth and convicts in welding. The state even arranged to transport the convicts from the jail to jobs at the Avondale shipyard, where they were paid only around $7 an hour, as opposed to the prevailing wage of $14.15 for a regular employee.

And let's not forget the football and basketball stadiums, nearly all financed by sales tax increases, property tax exemptions, and other considerations, as noted above, while the ownership has no requirement to pay back any of it.

If we're going to get rid of corporate welfare, we have to eliminate the local connections as well.

[QUOTE]I oppose all corporate welfare, does anyone agree with me?[QUOTE]

Alls I can say is: "HERE, HERE!"

P.S. anyone who wants a good idea of giant corporations and their influence on our society can read Fast Food Nation, by Eric Schlosser. Although it focuses mainly on fast food and agricultural giants, it does include other bits of info pertaining to Hugo's question.

I was hoping someone would target some of the actual programs, because this is exactly the area that I was talking about when I said " That being said, it is very difficult to seperate a business stimulis package that actually helps the economy and gets "bang for the buck" and corporate welfare"

Low interest loans- I have taken complete advantage of this. I have bought, developed and remodeled several rental units using low interest target loans, some being converted to grants when I met the criteria of the loan. Some of these loans have actually been 0%! How is that beneficial? Because the 200% increase in property values and related property taxes actually make the goverment more in revenues over time than the possible "private sector" loans (though traditional banks carry the paper) - so, in moderation and correctly done, this is not corporate welfare. The same loan to a oil company that has it's own financial agency would be corporate welfare however.

Enterprise zones- I made most of my development investments in this area, due to favorable loan guarantees and tax abatements- which the net result was me rehabilitating several former crack houses! How much did the goverment actually save on that one, especially considering I am now paying full property taxes AND income taxes on my profits 5 years later?

Training grants- I used goverment money both for my wifes business and mine, some of which taught me how to take advantage of the very things mentioned here LOL

Bottom line is- through these programs, I make a good 20thou a year in unearned income, that is taxed. Plus I pay 5 figures a year in property taxes, minimum. All these represent an INCREASE in revenue for the state and feds, far more than the initial benefits.

So though I dont' like corporate welfare, I see the difficulty in seperating the good and the bad!

I have no problem separating the good from the bad. All of these programs are unnecessary. It is good you have availed yourself of some but that does not mean they should have been there in the first place.

Property taxes are unfair. Eliminate them if they are a barrier to improvements. Government taking your money but then giving it back to you is inefficient.

Business should have a level playing field. Special interest tax breaks are unfair. There are business which generate taxes while never receiving a tax kick-back.

Gray seal- with all due respect, this is one field you don't know what you are talking about in the least.

I said I paid five figures in property taxes last year, and even I believe they are fair LOL- since property taxes are almost always based on the local level they also are used exclusively on the local level- police, fire departments, road maintenance (and to a small degree, road building) schools and the basic things that create a quality of life in a town or city. Property taxes are the most fair of all, because they truly charge the poeple that use the services the most- for instance, in our city, the Safeway grocery stores pay the most property taxes, but they also get the most of the services, from infrastructure road maintenance that allows customers to get to thier stores 24 hours a day even in the middle of a snow storm etc.

Property taxes may be the only way to MAKE improvements- without infrastructure developement and a clean safe city to do business, YOU HAVE NO BUSINESS!!!!!

All the programs listed by Niteguy actually make it easier to do business, not harder, and typically create more revenue than has ever been spent, except in the true corporate welfare scandals.

McDonalds recieved millions of dollars to advertise in Japan, and they did the singing grapes ad, and the Japanese thought it was potatoes and ended up being totally confused about the whole commercial- McDonalds risked nothing, didn't lose a dime and the whole thing was charged to the taxpayer- NOW THAT is corporate welfare!!

I have been having side businesses my whole life, only had one fail, last year, and otherwise have made a pretty good pot of money doing them, and am pretty succesful for my age. Goverment helps business, especially small businesses, far more than it hurts them. I set my wife up in Daycare, she is pulling home some serious dough, but let me tell you, it is possibly the most regulated business this side of a nuclear power plant- but guess what, it lowers my liability rates so far, that it actually pays to jump through the hoops! Plus, since I made sure that 25% of her business caters to day care assistance, I am able to take advantage of a plethora of grants and loans, the loans, remember, ARE PAID BACK, so the goverment even makes money on that! My house mortgage interest rate is now less than 4% thanks to the day care assistance bill pushed through by my good buddy Clinton- that guy made it good for business, no matter how you slice it. But I do think there was some "falling through the cracks" at the same time.


For me, even the most "obvious" corporate welfare to some poeple sometimes pay off BIG TIME- take the sports arenas- seems like a boondoggle on the face of it, but most of these venues have so much "side revenue" from property values going up to full hotels due to conventions etc that THEY even pay off for a local goverment. The real key there is to not bite off more than they can chew- for instance, you don't want an NFL team where there is a commutable populaiton of less than a million- otherwise, just won't support the team. But these venues produce hundreds, if not thousands of businesses that take advantage of the natural location of having hundreds of thousands of poeple drive or walk by thier stores.

CruisingRam, I respect and applaud your entrepreneur abilities. People like you are the reason our society thrives. If no one was struggling to organize and provide new services at competitive prices we would stagnate as a society. Sharing your insights and first hand experiences is highly constructive to this debate.

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It is true that most businesses which are subsidized do provide valuable products and services to society. I also recognize they pay taxes. I disagree with the opinion that these are any reason to support subsidizations.

How come all businesses which provide valuable products and services do not receive equitable subsidies? What makes the selected few worthy and eligible and are those reasons valid?

Let me take the example of the sports arena. If there were no tax payer money for them, stadiums would still be built, hotels would still be built, conventions would still be held, and taxes from them all would still be collected. Tax dollars are necessary for them to be built. Some people at these venues make over six figures and some over seven figures. Why do these people need welfare? I know about the baseball stadium proposal in St. Louis. They wish to take Missouri state tax to assist in building the stadium. This is hardly local dollars helping a local economy.

We have Tax Increment Financing in my area as well as Enterprise Zones where property taxes are forgiven. People who make six plus figures are receiving these subsidies. Businesses negotiate to get these perks. Do these business thrive and do well and pay taxes eventually? Sure. But not for a while. At the same time, other businesses are coming into the area without any subsidies, thriving and paying taxes from the get go. Are these perks necessary for businesses to move in to the area? Absolutely not.

I was on the School Board and was involved directly and indirectly with decisions which provided corporate welfare. People on my board had personal advantages to supporting such spending of public money or they fell victim to the desire to hob nob with the local rich and famous. Some also appear to get self satisfaction using public money as they own and having an active role in new ventures as doing so gives them ownership in those projects.

Supply and demand dictates that consumption will increase as price is lowered. Clinton targeted loans and grants are using that principle. Public spending on infrastructure is a example of corporate spending which I think is a good thing. I doubt many non-infrastructure businesses need any sort of subsidy. Perhaps day care would be an exception due to its ripple effect, I need more information and time to think that one over. I am of the opinion that many of these targeted grants and loans were done for political reasons. Some people will get the impression government is a necessary investor in order for any business to succeed and that would be a good thing for politicians who want as much money as possible going through their hands.

I did not mean to get into a discussion of property taxes other than it is unfair to unevenly apply such taxes. If it is beneficial to a business to lower or eliminate property then such thinking should be applied to all businesses, not a selected few with insider political ties. It is otherwise unfair and pandering which should be illegal but is not currently.

I am unclear as to one of your points. You compared the McDonald's welfare to your own and said McDonald's in obviously welfare while your own is not. What is the difference?

I started and own my business. A competitor across town was offered a very high price for their business. It was a high enough offer, they could move a short ways, build again, and continue their business and have plenty left over. Someone suggested they check with the state for some grants and loans. I spoke with one of the owners who told me they discovered they were eligible for over a million dollars in grants over and above the huge profit they had already made. He was kinda embarrassed they could get so much. Those owners think such use of tax dollars is a waste and it made them feel dirty to take some of it.

Here's a great example of corporate welfare that I saw on 60minutes this last Sunday that Republican congress against Pres. Bush will be passing within the Energy Bill.

http://www.cbsnews.com/stories/2003/09/19/...ain574250.shtml

Wrong, wrong, all wrong. We're not talking about building a new stadium in an expansion city, here. We're talking about businesses that can already afford a new stadium on their own, demanding a new stadium, or picking up and moving to a different city. And forcing the city/county/state to build it.

Orlando Florida. Under the original deal, increased taxes paid for the stadium, and while the city owned the stadium, they gave the use of it to the Magic, rent free. Concessions, parking, all of it went to the Magic, with no contract to reimburse any of it by the team.

Now, Rich deVos, multi billionaire owner of the Orlando Magic, decides that there just aren't enough skyboxes to net him the revenue he thinks he deserves. So he goes back to the city and county to try and get them to build him a new stadium. Bear in mind, that the original arena is still ten years from being paid off, and it was being paid for by Orlando and Orange County taxpayers. When they balk, he threatens to pull up stakes and move to Kentucky. City and county cave, cough up even more tax dollars, and now Orlando has two stadiums, one of which the taxpayers can't get any return on, because now it's empty more than not.

By the way, having lived there during all this time, I can tell you for a fact, that there were no "thousands" or even "hundreds" of businesses that came along as a direct result of this boondoggle. And proerty values didn't go up in the neighborhood, they actually declined.

So now taxpayers are funding two stadiums in the area, and the taxes being used here, cannot be used for the local schools, or road building or anything else.

So, tell me why it is a multi-billionaire cannot take out a bank loan, and build his own business, like every one else?

Edited to add: If you really want to see the damage this kind of corporate welfare causes, read the book Field of Schemes, by Joanna Cagan and Neil deMause,
Common Courage Press. it will really open up your eyes.

Yes, the Orlando thing seems to be completely indefensable, and I was pointing out that the McDonalds thing was a clear cut case of Corporate welfare. Perhaps there needs to be a cut off to annual revenues of a company and being able to recieve goverment tax breaks or subsidies, but this would even be difficult, because tax deferments or abatements for major corporations with guarantee of opening a major factory does have benefits despite the loss of revenue from the company itself, in the form of major "anchor" employer for a region.

Like I said, corporate welfare as identified is very bad, but very hard to seperate from incentive based programs that help the economy and nation. I don't know how to change it personally, without actually harming the entire nations economy, as many incentive/loan/grants actually are an integral part of business and investment in our country.

This is part of the reason I always laugh at poeple that make blanket statement of "cut goverment spending in half" or some such- and have no idea the negative effect that will have. Goverment and business in ANY successful economy IN THE WORLD is completely intertwined. It is a crooked game we play, but to not play is not an issue if you don't want to be a wage slave your whole life!

It is much easier to say "end corporate welfare" than to actually do this thing, even if you had carte blanch to be emporeror for a day and end it by decree, and not harm the economy for possibly decades to come.