Public Policy Corporate Subsidies


PublicPolicy: Corporate Subsidies

Corporate subsidiesare frequently used to describe the bestowal of tax breaks, moneygrants, or any other special treatment from the government. Thesefavorable treatments are often on selected corporations, which areviewed to imply that businesses are less needy of such kind offavorable treatment than the poor people. The term is interchangedwith crony capitalism, and thus draws a lot of differences wherecorporate subsidies might be restricted to major corporationsdirectly from the government. Tax loopholes and all forms of tradedecisions and regulations are then excluded, which when put intopractice could be more than any corporate subsidies (Kingston, 2012).The paper, therefore, will discuss in detail public policy issue inrelation to corporate subsidies, the effectiveness of the currentgovernment on the question by looking at the reasons, and proposedchanges in this public policy if I was the president.

Also known as the corporate welfare, the corporate subsidies label inthe United States is considered unwarranted, excessive, inefficient,and unfair and is brought about through lobbying (Kostigen, 2012).The name is used to decry the advertised objects to be beneficial tothe general welfare of the corporates, which spend a significantamount of money on large corporations, often in anti-competitive oruncompetitive ways. In the United States, for instance, agriculturalsubsidies are often portrayed through the public eye to be ofimportance and helpful to the hardworking, honest farmers to remainafloat (Kingston, 2012). However, most of the income, which isaccrued through selling the commodity support programs, is in actualsense channeled to large multinational agribusiness corporations. Thereason for this could be because these corporations own aconsiderably great percentage of production.

In 2006 fiscal year, for example, the United States federalgovernment spent a total of $93 million directly and indirectly toprivate sector corporates and business. The issue was that supportersof corporate subsidies view it a justification, which is aimed atremedying some market failure. Often, these market failures on whichthe corporate programs are placed upon are either overblown out ofproportion or that they do not exist entirely (Kostigen, 2012).However, the United States federal government continues to offersubsidies to some of the biggest corporations in America, forexample, General Electric, IBM, Xerox, Dow Chemical, Boeing, andothers (LeRoy, 2005). Looking at the policy from a differentperspective, as the current government policy put in place beeneffective?

The current policy on the issue has not been active because of thetreasury structures put in place. Again, the federal budget is alsoto blame since it is filled with loans, a potpourri of grants, loansguarantees, and other forms of subsidies, for most of the Americans.The Treasury is also another reason to blame because it has been openfor decades to any person or corporation inclined to the public(Kingston, 2012). The Policy is also not fully implemented to handlethe beneficiaries that argue that these corporate subsidies are inthe best interest of the public. Again, the system has not beeneffective because it has failed to curtail the notion of corporatesand business, which believes that the profits accrued, should bethere while the losses incurred should be shared equally with thepublic (Kostigen, 2012). The effectiveness is because of the policyunable to put emphasis to the policymakers on the need to underwriteevery industry. But given a chance to be the American president, whatchanges would one propose?

Given a chance to be the president, I would propose reforms to theseprograms through the Corporate Welfare Reform Commission (CWRC) sincethe corporate subsidies transcend all agencies in place. I wouldensure that the Commission handles its function like the MilitaryBase Closure Commission (MBCC), which will list all the programs inplace, present it to the Congress (Kingston, 2012). Under my orders,the Congress should either hold up or down the vote on everycommission’s proposal. Again, I will ensure the budget from thefederal government is examined to limit funds allocated to theseprograms.


Kingston, S. (2012). Greening EU competition law and policy.Cambridge: Cambridge University Press.

Kostigen, T. (2012). The big handout: How U.S subsidies andcorporate welfare corrupt the world we live in and wreak havoc on ourfood bills. Brunswick, Vic: Scribe Publications.

LeRoy, G. (2005). The great American jobs scam: Corporate taxdodging and the myth of job creation. San Francisco, Calif:Berrett-Koehler Publishers.