Definition of Corporate Welfare

What does the term "corporate welfare" mean? What is meant by the term "corporate welfare"?

The term "corporate welfare" is often used derisively to refer to a government's favorable treatment of corporations.

For instance - let's say that a government decides to give a company a $48 million grant in exchange for building a new state-of-the-art factory. This could be referred to as "corporate welfare", as the government is giving a large corporation tens of millions of dollars.

Welfare is defined in the dictionary as "aid in the form of money or necessities to those in need".

Definition of Corporate Welfare  - Financial Dictionary"Corporate welfare" can include tax breaks and grants, amongst other things.

Proponents of giving grants and tax breaks to corporations argue that they are necessary in order to lure companies to a country or state. For instance - let's say that a government decides to give an automobile company a $48 million grant to help the company build a new factory. Proponents of the grant will argue that the new factory will create thousands of jobs and help to stimulate the economy in the surrounding area. They also argue that another government will give the company what they want, and that the company could easily go elsewhere.

An example of "corporate welfare" on a local level - a mega supermarket chain wants to come to town. They negotiate with the local municipal government, eventually winning short-term cuts in property taxes and favorable changes to zoning regulations. Some would lash out at such treatment, calling it corporate welfare.

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