Gravy train.

The Big Ripoff: how big business and big government steal your money, by Timothy P. Carney (Wiley, 285 pp., $24.95).

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THE relationship between business and government is one of the most misunderstood in all of politics. Many people reflexively assume that wealthy corporations conspire with Republicans to cut taxes and loosen regulations. The reality is far different, as close observers of politics know: Big businesses almost always prefer favors to free markets. Hence, big business eagerly works with both parties to ensure a steady stream of narrow tax breaks, subsidies, and countless other forms of corporate welfare. In The Big Ripoff, investigative reporter Timothy P. Carney neatly documents the countless ways big business has succeeded in plundering state and local governments, hurting consumers and taxpayers in the process.

The first part of the book deals with the relationship that wealthy individuals and big business have with fiscally liberal officeholders and the Democratic party. Carney demonstrates that corporate PACs frequently give large donations to Democrats, and even larger donations when Democrats hold political power. Additionally, during the most recent election cycle, nearly all of the multimillion-dollar contributions went to groups that supported Democrats and other liberal causes. Perhaps the most striking illustration of the cozy relationship between big business and the Left is that Barbara Lee, the only member of Congress to vote against military intervention in Afghanistan, receives more in corporate contributions than does Ron Paul, the most libertarian member of Congress.

In subsequent chapters, Carney demonstrates the benefits business reaps from these big contributions. He shows, for example, how large donations to both parties from the agribusiness Archer Daniels Midland keep federal ethanol subsidies flowing. Another culprit is Enron, which--despite its frequent proclamations in favor of free markets--eagerly supported regulation in California and elsewhere that benefited Enron at the expense of its competitors.

Even the famous 1997 tobacco settlement is an example of this unhealthy relationship--because it ended up being a boon to big tobacco. Even though the tobacco companies had to reimburse millions in state Medicaid funds, the settlement prevented smaller tobacco companies from charging lower prices than the tobacco giants.

Similarly, General Motors supported the stricter emissions standards of the 1970 Clean Air Act because it had done more research on reducing emissions and could better afford the mandate. Also in the 1970s, most large airlines fought aggressively against airline deregulation, because the existing regulations blocked competition and assured them substantial profits. Today, many big businesses support environmental regulations because their smaller competitors frequently lack the resources to comply with them. In fact, many large corporations even donate large sums to environmentalist groups such as World Wildlife Fund and the Natural Resources Defense Council.

Even more surprising than corporate contributions to environmental groups is the extent to which businesses seek to impose higher taxes on everyone. Many corporations support estate taxes because they are largely exempt from them. Furthermore, many corporations have made tidy profits by purchasing businesses that individuals have had to sell because of onerous estate taxes.

While California's historic 1978 tax-relief measure, Proposition 13, was avidly supported by homeowners and some realtors, big business provided very little financial support. More recently, Colorado businesses showed little enthusiasm for Colorado's Taxpayer's Bill of Rights (TABOR) when it was introduced in 1992 and even worked to loosen TABOR's tight fiscal limits in a 2005 referendum.

Overall, Carney does a fine job of detailing the countless types of preferential treatment corporations obtain from elected officials. But what makes this book unique is that Carney provides numerous illustrations of the damage that corporate welfare does to ordinary citizens. While many conservatives and libertarians can make an effective theoretical case against corporate welfare, Carney vividly describes the human costs of these programs--introducing readers to people who have lost their jobs because their property was seized through eminent domain, or because the Export-Import Bank subsidized domestic companies to move overseas.

My only complaint is that Carney could have made somewhat clearer the distinction between large and small businesses on these issues. While big business often supports higher taxes and more regulation, small business historically has tended to be more hostile toward big government. Carney mentions this, but doesn't make enough of it. Furthermore, he concludes the book without giving practical advice on what readers can do to combat corporate welfare. But by documenting its detrimental effect on workers, consumers, and taxpayers, he has rendered an important service.

Mr. New is an adjunct scholar at the Cato Institute, a summer fellow at the Heritage Foundation, and an assistant professor at the University of Alabama.