This paper assesses the strategy and efficacy of giving corporations direct grants to support innovative research. We define corporate welfare as the use of taxpayer dollars to provide benefits to specific firms or industries. This usually means direct subsidies, payments, grants, and the like to specific corporations.
Any company can take advantage of many of the deductions currently available in the tax code.
A corporation has a right to the profits it makes in the marketplace. Tax deductions simply let corporations keep more of their profits. Therefore, they are not benefits that cost taxpayers any money, and not included in our definition of corporate welfare. We strongly endorse lower taxes, generally and in the context of the debate on how to further innovation. Realistically, closing a tax loophole without a corresponding decrease in the corporate tax rate would amount to a tax hike.