The term corporate welfare refers to welfare or financial assistance that are given to businesses or corporations by the government welfare department. There has been an extensive amount of controversy regarding corporate welfare, as the federal government is not permitted to redistribute the funds that it collects through taxation, in order to improve the individual or corporate financial situations.
In addition, many individuals argue that corporate welfare provides some corporations, particularly private companies, with unfair advantages over other businesses
Instead of creating an even “playing field”, corporate welfare provides select businesses with favorable treatment. Despite the debate regarding corporate welfare, this financial assistance can, in some instances, be advantageous in stabilizing the national economy.
There are many different types of corporate welfare that a company may receive from the government.
One type of corporate welfare, which was seen frequently during the economic crisis that began in 2008, are corporate bailouts. A bailout occurs when the government provides a failing business with financial assistance, in an attempt to help the corporation avoid bankruptcy and closure.
However, bailouts are not the only method through which the government provides corporate welfare.
Tax breaks are another form of corporate welfare frequently extended to specific businesses. The business may be required to pay fewer taxes, or it may be exempt from paying taxes all together. Subsidized loans and insurance money may also be considered types of corporate welfare.