Business, Legal & Accounting Glossary
Corporate welfare is a term describing a government’s bestowal of money grants, tax breaks, or other special favourable treatment on corporations. The term was coined by Ralph Nader in 1966, and creates a satirical association between corporate subsidies and welfare payments to the poor, and implies that corporations are much less needy of such treatment than the poor. The Canadian New Democratic Party picked up the term as a major theme in its 1972 federal election campaign.
Subsidies considered excessive, unwarranted, wasteful, unfair, inefficient, or bought by lobbying are often called corporate welfare. The label of corporate welfare is often used to decry projects advertised as benefiting the general welfare that spends a disproportionate amount of funds on large corporations. For instance, in the United States, agricultural subsidies are usually portrayed as helping honest, hardworking independent farmers stay afloat. However, the majority of income gained from commodity support programs actually goes to large agribusiness corporations such as Archer Daniels Midland, as they own a considerably larger percentage of production.
According to the Cato Institute, the U.S. federal government spent $92 billion on corporate welfare during the fiscal year 2006. Recipients included Boeing, Xerox, IBM, Motorola, Dow Chemical, and General Electric.
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This glossary post was last updated: 19th April, 2020 | 1 Views.