Cato: Corporate Welfare Tops $100 Billion Annually

Friday, July 27th, 2012 and is filed under Blog, Economy

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No matter who wins control of all branches of government, it will be an arduous task to wean the American people off of 80 years’ worth of welfare and entitlements.  However, the least we can do is tackle the “lower hanging fruit.”  That would be corporate welfare, of course.

The Cato Institute just released a research paper detailing all of the federal subsidies that are given to businesses and industries.  The total cost of these subsidies is $100 billion per year!  Remember that these subsidies not only cost the taxpayer $100 billion in additional taxes or debt, they also distort the market in a way that tilts the playing field towards specific industries, companies, and products.  The cascading effect of extras costs to consumers in incalculable.

Here are some important takeaways from the Cato study:

  • Not surprisingly, the worst offenders are those departments that should be eliminated; Agriculture ($25.2 billion), Energy ($17.3 billion), Commerce ($4.1 billion), and HUD ($16 billion).
  • Most of the subsidies violate the equal protection clause by benefiting a specific company or industry under the guise of vague goals.  They include programs that target community development, rural development, minority businesses, farming, housing, and green energy.
  • Subsidies also come in the form of tax preferences that are tendentious towards parochial interests and regulations that are often written by a specific industry in order to give them a competitive advantage over consumes or other competitors.  The federal government also tilts the playing field towards specific interests with selected trade barriers.  Sugar price supports represent the poster child for such subsidies.

Read the full report.  It’s an indispensable resource.

Liberals always purport to be on the side of the little guy and the pursuit of equality.  But in their pursuit of a utopian paradise of equality, they create a special interest hell that benefits the well-connected, engenders a corrupting relationship in government, and harms consumers and taxpayers.  Who are the true progressives?