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Money & budgets

subsidy

Government money or a tax break that lowers the cost of an activity: crop payments, insurance credits, energy incentives, student aid.

In full

Subsidies run through appropriations, through the tax code as credits and deductions, and through loan guarantees that cost nothing unless the loan defaults. Which channel is used changes how visible the subsidy is: a tax expenditure rarely gets an annual vote, while a direct payment does, though the economic effect can be identical.

Where to go next

Written from Congressional Budget Office, Budget Topics

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A plain-language explanation for civic education, not legal advice. When in doubt, the official source named above controls.