The Foundation recently published its first ever Policymakers' Guide to Corporate Welfare. Over the coming weeks, I'll be highlighting various types of corporate welfare using excerpts from the Guide. The full Guide can be read online here.
Today, we'll examine the question, What is Corporate Welfare?
Conservatives have long questioned whether welfare is the best way to help the least fortunate among us. This concern was highlighted in the 1995-96 welfare reform debate that led to a significant transformation of America’s welfare system.
In his 1992 book The Tragedy of American Compassion, Marvin Olasky found that the culture of entitlement fostered by the welfare state eroded the traditional American virtues of seeking to better oneself and helping to better one’s neighbor. Self-improvement morphed into dependency while charity gave way to complacency. Social mobility gave way to a seemingly permanent underclass that more and more has to turn to the government for help.
More recently, a debate over a different type of welfare has taken hold. Today, conservatives are challenging whether what is often called “corporate welfare” achieves its stated goal of boosting economic growth. And, as in the case of traditional welfare, the debate extends beyond the effectiveness of corporate welfare to the impact it has on the principles on which this country was founded—particularly that of liberty.
Corporate welfare, also known as economic development, is widely used throughout Texas and the nation. From local tax abatements to the Export-Import Bank, governments provide billions of dollars each year in benefits to businesses in an attempt to improve the outcomes of the marketplace. In Texas alone, tax abatements, renewable energy subsidies, development incentives, and direct payments total more than $2 billion annually.
To read the entire entry, please go to p. 6 of the Foundation's Policymakers' Guide to Corporate Welfare.