Corporate welfare should not be accepted at the expense of the social welfare in a country. Many western countries accept corporate welfare but reject social welfare based on economic development. They argue that the corporate enhances economic progress while the social promotes too much dependence that drags the economy. For instance, a poor mother and her daughter are said not to contribute anything to the productivity of the economy. Being capitalists and advocates of individualism, the countries fail to take seriously the support of the helpless and marginalized. However, corporate welfare is not a guarantee of a country’s success due to the following reasons.
Firstly, welfare is inhuman and causes imbalance and instability in different institutions. The poor and minority groups in the society are robbed of the little wealth they possess to be transferred to the richer (Corporate welfare vs Social Welfare, (n.d.).The wealthy in society continue to accumulate more wealth while the lower-income earners suffer. For instance mothers and children living in poverty, the elderly, and individuals with mental illness are drowned into more and more suffering and starvation because they cannot take care of themselves. Corporate welfare disharmonizes people and institutions due to disparities that emerge in terms of the status quo.
Secondly, corporate welfare makes use of public funds just like social welfare. The government comes with policies to solve social problems of the lower class such as housing, education, food, and medicine. Through corporate welfare, the government aims at reinforcing companies for more productivity. In both welfares, they make use of public funds to cater to the social and economic needs thus no set of government policies should be left out for the sake of equity in resources distribution.
Thirdly, corporate welfare adversely affects the economy when the wealthy dodge payment of taxes. The government budgets a great deal of money towards the corporate unlike in social welfare. Although recipients in social welfare may defraud government funds offered to them through giving false information, a huge amount of money is not lost compared to the funds budgeted for various development programs. The recipients in corporate welfare embezzle trillions of dollars which they keep in offshore accounts. This affects the economy once the public debts increase yet the purpose for the funds is not met. Most countries have experienced this problem which has weakened and dragged their economies for example the United States of America and Europe (American Government, n.d.)
Moreover, the media does not focus on the frauds caused through corporate welfare but they concentrate on the social problems that the government is trying to solve. The media rarely focuses on tax evaders, government fraudsters, or wealth redistribution to the rich. Rather they concentrate on the social evils caused by the lower class people such as the poor and single mothers caught cheating about food. Small farmers incurring losses, and how illegal immigrants are being assisted to get housing and food. As a result of this, the economy is immensely affected due to the loss of large chunks of money which the government allocates for developments.
Fourthly, corporate welfare sometimes is a burden to the taxpayers. The government spends millions on research and advancements to sustain corporate welfare. They embark on the production of things such as weapons and pharmaceuticals. This forces them to direct huge funds to companies that are involved in the production. Corporations reap huge profits but taxpayers are left to pay the bills in terms of increased taxes thus affecting the economy.
Large firms in agribusiness also benefit from government subsidies thus have more benefits than the small farmers who end up getting too little due to the tax burdens they have to incur. Additionally, incorporating welfare taxpayers are affected as the state endeavors in saving the financial structure of a country. When the government tries salvaging financial institutions, it does not control various criminal activities like money laundering, scandaling salaries to the executives. Worst of all the state uses the taxpayers’ money to bail them out once the criminals are caught and presented to a court of law.
The financial institutions do not suffer during bad market times, unlike the taxpayers. When the government embarks on infrastructure development, it claims to be hiring companies and creating more jobs for people, but still, the taxpayer has to come in to pay the cost. Unfortunately, most of the taxpayers are lower-class people while the rich are busy evading those taxes.
From the statistics, a country like the United States of America spends millions of dollars benefiting the rich through corporate welfare. The poor continue to be robbed, starved, and oppressed, particularly the minority groups, such as Black Americans, Muslims, and Asians. The Biden’s government reported on 21 June 2021, to be focusing on multimillion-dollar welfare especially in renewing energy (Return of Corporate Welfare State, n.d.).
The companies to benefit belong to the rich thus Biden’s government will be enriching them yet the minority groups are still suffering and less attention is given to them. From the above explanations, it is clear that concentration on the corporate and neglecting the social welfare is a problem to a nation. It does not only affect the development of a country but it also causes suffering to the less fortunate in the society. It also raises the cost of living thus leading more people to become impoverished. Therefore, for a government to succeed in taking a country to a higher level, it should try to balance social and corporate welfare now and in the future.
References
American Government (n.d). Web.
Corporate welfare vs Social Welfare (n.d.). Web.
Return of Corporate Welfare State (n.d.). Web.