Along with scandals, a concern for many Americans is corporate welfare.

The term corporate welfare was first coined by Ralph Nadar in 1956. It defines the special treatment and tax breaks that corporations are given, usually at the expense of ordinary citizens, but sometimes at the expense of smaller companies. It is an especially poignant term today, in light of many social welfare beneficiaries being denied benefits. Politicians claim that social welfare recipients must not expect a hand out or a free ride; however, at the same time, these same politicians are pushing through legislation that allow corporations to pay less (or nothing!) in taxes.

Types of Corporate Welfare

Corporate welfare comes in various forms. One type of corporate welfare allows companies to set up an off-shore office in a country that has lax tax laws. One scandal that caused a national outcry was when corporations were setting up offices in the Grand Caymans to avoid paying corporate income taxes.

Another type of welfare involves location. Corporations will look to set up offices or factories in a number of locations, and with the promise of jobs for an area, the corporations will force the communities into a bidding war of tax breaks, land at little to no cost to the company, and promises of improved infrastructure at the cost to the taxpayer, not the corporation.

A third form of corporate welfare may be the type that creates the largest outcry from citizens. When a large corporation falls on hard times, the government helps to bail the company out. This could be with tax breaks or government buyouts. The airlines facing bankruptcy are a good example of this type of welfare. The government is making sure that the largest airline companies will continue flying even if it might be best for the consumer to let the free market take its natural course.

Deregulation

There are those who consider deregulation as a form of corporate welfare. Deregulation happens when the government releases control over a certain type of entity that once had to follow strict government guidelines. These entities include air travel, electricity, television cable, and the phone company. The idea was that this was supposed to create competition and be better for the consumer. What it has actually led to is corporate greed, skyrocketing prices, and a decline in quality of goods and services.