Origin of corporate welfare in the US
The corporate welfare in the US came about during the beginnings of the first congress established in 1794 when farmers in the state of Pennsylvania ganged up and complained about the unfair taxes that they were paying to the government. This led to a situation where the government started manipulating tariffs as a way of offering subsides to manufacturers.
The government also made a move to partner with private banks in order to come up with a national bank (Federal Bank) which was to serve the government and the economy in general. This therefore means that corporate welfare in terms of government handouts began a long time ago the only change is the fact that the amount keeps getting bigger with time. It is important to note that these handouts are taken from the treasury and is funded by taxpayer money (Huff & David, 312).
Corporate welfare in the United States can be used to refer to the financial assistance, tax waivers and any other form of support offered to businesses and corporations by the government.
The main difference between corporate welfare and individual welfare is that the government does not use corporate welfare to improve living standards of its citizens or to reduce poverty levels. The federal government of the United States instead uses corporate welfare to give financial aid to corporations and companies that are seen as strategically positioned to benefit the government in one way or the other. This is normally in form of subsides, contracts and other forms of financial aid.
Corporate welfare was mainly established in order to protect the interests of a few elite individuals in the country and ensure that their businesses and corporations do not get affected by economic downturns and also in order to ensure that they offer handsome returns to their owners and investors. Corporations that are offered this financial aid are also normally viewed as strategic corporations for the federal government in terms of helping the government to implement various policies (Huff & David, 313).
In every financial year, the government of the United States pumps billions of dollars into the corporate welfare program. It is important to note that the industries that the government supports need a lot of money and are therefore very expensive. Some of these include technological advances, research and development and other industries that are strategic to the government. In fact, most of these projects are extremely expensive and require the government to allocate them a lot of funding every year.
Despite the fact that there exists various controversies over the contribution of corporate welfare to the economy of the United States, it is evident that most of the companies operating in America have succeeded in their areas of operations and this is mainly due to the financial funding offered to them by the government in terms of subsides and other forms of financial aid (Huff & David, 315).
There are various interventions that need to be carried out by the president in order to ensure that the corporate welfare program is more beneficial to the taxpayer as well as the government itself. The government can identify corporations that offer more direct benefits to consumers and support them through subsides instead of giving financial aid to companies that only benefit a few of the elite in government.
Works Cited
Huff, Daniel and David, Johnson “Phantom Welfare: Public Relief for Corporate America”. Social Work, 38.3 (1993): 311–316.Print