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10/28/2009
The subsidy game
“The greatest threat to the U.S. economy is not creeping socialism. It’s creeping subsidism,” Michael Lind tells us. “The tax breaks that ate America.”
Does the annoying nanny-state left want to replace French fries with asparagus spears? Then call for an individual tax credit to encourage healthy eating, and label it a "nudge" in the manner of Richard Thaler and Cass Sunstein. Does the big-government right want to expand healthcare without paying for it? Then call for a tax credit for "medical savings accounts."
Lind makes excellent arguments – and hits corporate tax breaks too. I see it over and over, day in and day out with this health care reform debacle. The vast majority of Americans think someone else should be paying for their health care. I’ve talked about it before – and this subsidy business continues to show up somewhere every single day. A Journal Sentinel article yesterday spoke of young adults who support health care reform – but don’t think about how they’re going to pay for it.
Rep. Paul Ryan, a Janesville Republican, said the age-rating issue could have serious implications for young people, with young adults likely to experience "sticker shock" once lawmakers finalize the legislation…
But Rep. Tammy Baldwin, a Madison Democrat, said government subsidies will keep costs down for young Americans: "I don't think a mandate will survive if it isn't affordable for people"….
How to pay for it? Subsidies, of course – because health care is, many claim, just too expensive otherwise. The Subsidy Godmother will pay for it. Of course.
Rich Lowry exposes the underbelly of the problem with Democrats figuring out how to pay for the public option.
The study made Democrats yelp so loudly because it hit on such a sensitive spot. The Democrats must make people believe their inherently unbelievable promise of vast new public benefits for free.
You better believe Speaker Pelosi is good at these promises. Now she’s unbelievably calling the public option “the competitive option.” What?
Pelosi said that was a misconception and that any taxpayer money used to start up the public option would be repaid. She also said such an option would ultimately drive down government health care costs.
Like Rich Lowry, Robert Samuelson is on to Congressional subsidizers too.
The promise of the public plan is a mirage. It’s political brilliance is to use free-market rhetoric (more "choice" and "competition") to expand government power.
A mirage – anything but the free market. And indeed, the Subsidy Godmother again.
Subsidy after subsidy. They’re everywhere. Below are a few Wisconsin examples - from legislative reports yesterday alone.
- AB-175 would extend the life of a tax incremental district in the City of Racine, increasing the amount of time property stays off the tax roles. A subsidy for economic developers.
- AB-302 would exempt nonprofit snowmobile clubs from personal property tax. A subsidy for snowmobile club members.
- AB-375 would exempt the La Crosse Community Theatre from paying property taxes. A subsidy for the Community Theatre.
- AB-449 would exempt fuel used in a commercial fishing vessel from sales tax. A subsidy for commercial fishermen.
- AB-519 would extend the life of a tax incremental district in the City of Sheboygan, increasing the amount of time property stays off the tax roles. A subsidy for economic developers.
- SB-144 would extend the allowable life of environmental tax incremental districts, increasing the amount of time property stays off the tax roles. A subsidy for economic developers.
And there are hundreds more where these came from. I’m not passing judgment on any of these bills – merely pointing out the darned subsidies - everywhere all the time. All of us with our hand out. Subsidies. Wrecking America.
Jo Egelhoff, FoxPolitics.net
COMMENTS
There's an undeniable law in every country on this planet. The law of gravity. (Stay with me, this really does connect to Jo's article.)
The law of gravity can be temporarily circumvented, but inevitably the law manifests itself and stuff must come down.
What may have started many, many years ago by a well-intentioned (albeit misguided) lawmaker with a noble cause that "everyone could agree on", has again proven the law of gravity AND how it applies to the 'slippery slope' of government assistance for a program that wasn't fiscally sustainable.
The litany of special-interest subsidies Jo has outlined in her post today is the manifestation of what you get when lawmakers (no matter how innocently) start picking a cause that needs 'a little assistance' and chooses to use the taxpayers' dollars to support that cause.
It starts out as a well-intentioned good idea for "the greater good" and by the time it reaches the bottom of the hill it turns in to tax breaks for snowmobile clubs. Pl-ease, give me a break. (No offense to snowmobilers, do your thing - it's a free country ... just don't use MY TAX DOLLARS to keep your club afloat, pay your share!)
A noble cause like health care "insurance" for all Americans (which, by the way, the CBO says current legislation in congress WON'T achieve) will undoubtedly turn in to neighborhood Jungle Gyms, improved sidewalks (gotta walk & exercise to stay fit and not use that health care system you know - prevention IS important) and maybe even seed money for Organic Food Stores.
The law of gravity. You can't get around it.
Government wasn't intended to be (and still should NOT be) the vehicle to pick winners and losers. It was intended to defend each person's right and ability to succeed within a free country.
The fix to "subsidies"? http://FairTax.org
Jeff Riedl (Wed Oct 28 07:06:51 2009)
One quibble I have with the arguments presented is that getting to keep the money you have earned is NOT a subsidy. Another is that I do not think there should be personal property tax on ANYTHING. The goods in this class were taxed during production, a sales tax applied at retail sale, that should be enough.
That said, I oppose special tax breaks, as it shifts the tax burden to those in similar categories. For example, exempting property taxes (or giving TIF consideration to new developments) means that existing businesses must pick up the slack. Often, established businesses indirectly subsidize their competition. Exempt one? Exempt them all.
It still comes down to the fact that we MUST reduce the size and cost of government if we are to have prosperity in the long haul.
Ken Van Doren (Wed Oct 28 11:52:44 2009)
>>> "Government wasn't intended to be (and still should NOT be) the vehicle to pick winners and losers."
Government does this every day, Jeff. Interestingly the winners always have campaign cash to throw around and the losers don't. It's called corporate subsidies, at both the state and federal level.
Paul Craig Roberts said it best: "One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests. Another conclusive hallmark is rising income inequality as the insiders manipulate economic policy for their enrichment at the expense of everyone else."
Your proposal for the Fair Tax is highly regressive and will simply make matters worse.
Jack Lohman (Wed Oct 28 12:04:32 2009)
How can you discuss "subsidies" in the same sentence as "french fries" and not connect the two? French fries and all the other corn-based junk that is clogging our arteries are the most shamelessly subsidized products in the American economy.
The Sconz (Wed Oct 28 14:39:02 2009)
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