Robbing American Taxpayers through Big Business
Robbing American Taxpayers through Big Business
For most Americans the term welfare is associated with any number of negative images: laziness, illegitimacy, family breakup, irresponsibility, and wasted tax dollars. We hear "welfare" and our minds conjure up a young unwed mother of two or three infants, huddled in front of a TV set in a public housing tenement and living at taxpayer expense on monthly Aid to Families with Dependent Children (AFDC) checks and food stamps. We react negatively because too often these checks subsidize bad behavior and encourage dependency rather than self-responsibility.
The American Heritage dictionary defines welfare as "receiving regular assistance from the government or a private agency because of need." What is surprising about our modern-day welfare state is just who it is that Congress really believes to be "in need."
Some of the most subsidized recipients of public assistance are not welfare queens housed in public tenement apartments. They are not even poor or ailing at all. Far from it.
America's most costly welfare recipients today are Fortune 500 companies. In 1997 the Fortune 500 corporations recorded best-ever earnings of $325 billion, yet incredibly Uncle Sam doled out nearly $100 billion in taxpayer subsidies.1 These welfare payments come in every conceivable shape and size: government grants, sweetheart business deals arranged by the Commerce Department, cut-rate insurance, low-interest loans, a protective wall against foreign competition, exclusive government contracts, and a mind-boggling maze of special interest loopholes in the tax code. Table 1 lists the 1997 appropriations for fifty-five of the most unjustified federal business subsidy spending programs as compiled by the Cato Institute. Their combined price tag came to $38 billion in 1997.
All but a small handful of America's wealthiest corporations have participated in the hunt for federal or state government subsidies. Most of these companies are double-, triple-, and quadruple-dipping. In 1996 General Electric won fifteen grants for $20.1 million. Rockwell International received thirty-nine grants for $25.4 million. Westinghouse Electric received fourteen grants for $26.1 million. Yet each of these companies had profits of at least half a billion dollars in 1996.
Corporate welfare has all the systemic debilitating effects, including dependency and self-destructive behavior, that characterized the troubled legacy of the Great Society social welfare agencies. Just as the social welfare state became a pernicious, self-perpetuating industry inside Washington, so it is today with the corporate welfare state. For example, Representative Dick Armey has shown...