Corporate welfare is the government subsidizing businesses. Corporate welfare comes in many different forms of direct government grants, loans, insurance, or subsidies provided to businesses. It can be in the form of trade barriers to protect U.S. firms from foreign competition; or a tax loophole that benefits a particular industry or company (Moore & Stansel, 1996). Depending on how the programs are defined, 75 to 125 billion dollars are spent each year on corporate welfare. The government hands out money and tax breaks to many different companies, even though they are making millions of dollars of profits per year. It is not a welfare based on need for poor, failing companies; but welfare for the large corporations who are able to use their influence to demand help (Moore & Stansel, 1996 and Mozilla, 1997). .
The corporate welfare program known as foreign sales corporation (FSCs) was made to encourage businesses to export their products. It has cost U.S. taxpayers more than 10 billion dollars in the 1990s, and 8 billion has gone to the largest corporations (Barlett & Steele, Nov. 16, 1998). To be part of this program, a company sets up a foreign sales corporation. This means they set up an office in one of 32 countries designated by Congress. The company then sends its exports through its offshore foreign sales corporation. Doing this a company can save 15% or more in federal income tax (Barlett & Steele, Nov. 16, 1998). .
In the Virgin Island there are 3,600 corporations with foreign sales subsidiaries on the islands. Business buildings to house all these offices are not part of the business area of the islands. The companies just hire a local firm to maintain their records, open a bank account, and provide an offshore postal address. The government stipulates that the corporation has to conduct an annual board meeting in the vicinity of their foreign sales corporation (Barlett & Steele, Nov.
