A friend of mine asked a question on Facebook, I responded, and he asked me to elaborate. Well, Pastor Harris, I’m gonna try.
The question: What is the difference between Poor Welfare and Corporate Welfare? I responded that one was the receiving of tax dollars while the other was use of tax loopholes. I’m going to amend the latter part now because certain government actions, like TARP, also gave corporations other people’s tax money. The issue of tax revenue is, after all, hopelessly complex.
But first, let’s take the partisan nature of this discussion out. I am a conservative, the guy who asked the question is a liberal. I’m not trying to convince him to join me, nor am I going to switch to his side. I think that, in general, there is a common belief that one party (the Democrats) are completely in support of social welfare and the other party (the Republicans) are hopelessly in love with tax breaks on big businesses.
However, a closer look at the votes on both sides of the aisle show these are generally true, but many elements of either side cross over on it. The same Democrats who decried the Export-Import Bank years ago when it was up for renewal are now saying it will do irreparable harm to shut it down. The Ex-Im Bank, however, is most noteworthy, however, of giving cash to big businesses while the little businesses struggle. You also see many politicians on both sides carving out money and tax loopholes for pet projects in their districts and their friends in the business industry.
The battle over the Affordable Care Act is one that usually pits Democrats vs. Republicans, with Republicans howling that it will ruin insurance. However, how much talk on that do you hear now that the Republican party is in control of both Houses of Congress? The reality is that there has been for a while now a movement within the Republican party to keep the ACA (better known as “Obamacare”) and just offer “fixes.” Politicians on both sides, as well, agree with certain expansions of current social welfare (like Medicaid) in their states.
So, without the partisan points getting involved here, let’s answer the question: What is the difference between social welfare and corporate welfare?
Those who need financial assistance from month to month at the lower end of the income ladder receive social welfare. Food stamps/EBT cards, the ACA, SSI checks, etc. all fall under this category. It is meant to help those who struggle, but it is money that is derived from already collected tax revenue. And, like all systems where “free money” is offered, there are issues. It is not, however, a system that can or should be fully destroyed (though, even if you wanted to, you wouldn’t be able to because of how deeply tied into our system it has become).
Those who wish for perks to promote business growth look for corporate welfare, however. This type of welfare isn’t so much derived from getting other people’s tax money as it is from exempting businesses from paying certain taxes. Like social welfare, it is not inherently evil – businesses create jobs, jobs offer money to workers, and workers spend that money to stimulate the economy – but it does carry certain risks. Some businesses have taken so much advantage of their perks that they have the money to send lobbyists to Congress to pass laws that help them and hurt competition. The biggest businesses so influence the political arena, that they keep benefiting from K Street, while folks on Main Street suffer.
As a result of both of these types of welfare, however, there is a problem: More money is inevitably requested by those who have become entirely dependent on them. There is no initiative for self-improvement of one’s situation when there is someone there to spoon-feed you all you need throughout your life or your business’s life.