Popular phrase to describe the practice of distributing public assets, tax revenues, or favors to private
corporations, where the transaction cannot be justified as a
fair market exchange, i.e., the government gives out more than it gets back. Such
government subsidies can take the form of direct spending (
bailouts,
R&D contracts), giveaways (public airwaves,
mining royalties, low-interest
loans), or
tax breaks (credits, exemptions, deferrals, and deductions)
Lobbyists favor tax breaks because they avoid yearly appropriations and settle into the
tax code where
Congress rarely ventures.
In the United States, current estimates of corporate welfare range from $80 billion to $195 billion a year at the Federal level alone, depending on who's counting (and whether they include capital gains tax breaks).
Phrase came into popular use in the media when Secretary of Labor Robert Reich used in during the 1994 Republican revolution which sought to end public welfare and government spending.