FRONT PAGE CONTRIBUTOR
Let’s Just Call the Bush Tax Rates a Subsidy
Listening to the self-righteous protestations of the class warriors, one would come away with the impression that the rich don’t pay any taxes. In fact, the top 1% of tax filers paid 37.4% of all federal income taxes in 2010; the top 2% paid almost 50%.
Unfortunately, when it comes to real handouts for the rich, liberals are silent. In their dyslexic worldview, a tax cut is a handout and a handout is a tax cut. That is why both Democrats and Republicans are plotting to surreptitiously slip in a farm bill to the final negotiations over the tax rates.
At present, more than 3/4 of farmers who earn upwards of $250,000 a year receive subsidies from at least one farm program. Farm subsidies and crop insurance programs help promote income inequality in farming by offering larger subsidies to those who already have larger farms. These farmers can enjoy multimillion dollar insurance policies that are subsidized in order to guarantee their multimillion dollar investments that would otherwise not be supported by the free market. Also, federal guarantees of bankers’ loans to rich farmers have further increased their borrowing capacity, thereby driving up the cost of land acquisition. This, in turn, has shut out small farmers from the business, making it nearly impossible for them to compete.
While liberal politicians like to talk about income inequality, they fail to mention the corporate welfare inequality. Here is what AEI scholar Vince Smith observes over at “American Boondoggle” regarding inequality in farm subsidies:
Since 1995, the top 10 percent of farm subsidy recipients have cashed 74 percent of all subsidy checks. In 2011, for instance, 26 individual holders of crop insurance policies collected more than $1 million each in subsidies to help pay their insurance premiums.
Ironically, in the same deal where both parties plan to raise taxes on those who pay the most taxes, they want to renew and augment farm subsidies to rich farmers. Democrats in the Senate are pushing for a new shallow loss program, which extends the coverage of crop insurance from catastrophic benefits to a guarantee of 90% of the farmer’s annual revenue. The idea that the government could guarantee members of a specific profession 90% of their income, especially when food prices are so high, is an anathema to our system of free enterprise. It will also line the pockets of the very people they desire to tax.
Last June, Senator Rand Paul illustrated this liberal hypocrisy by introducing an amendment to the Farm Bill, S. 3240, which would have eliminated farm programs for those with annual income above $250,000. Only 1 Democrat (Herb Kohl) in the entire Senate voted for this amendment.
So what gives? Extending current tax rates for those earning more than $250,000 is bad; subsidies for those same rich people are good? Maybe we should just call the tax rates a subsidy, and Democrats will support full extension.
This is yet one more piece of evidence that the fiscal cliff imbroglio has nothing to do with taxes on the rich. It’s all about growing government for everyone.
The message from liberals is clear. It’s not evil to be rich, so long as that wealth is first transferred through the circuitous cycle of government, special interests handouts, and Democrat reelection favors.