In recent weeks, we've been subjected to mellifluous pandering to our nation's farmers by liberals in both parties. They admonish us about the need to provide farmers with a "safety net" and to protect them from catastrophic events. To that end, they are pushing a massive $1 trillion Ag subsidy, which happens to contain over $750 billion in food stamp spending.
Aside for the fact that crop insurance is something that should be dealt with in the private sector, these supporters of Ag subsidies - especially the Democrats - are hypocritical in their treatment of farmers.
One of Reagan’s most incisive declarations was when he summed up government’s view of the economy like this: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Well, what the government can giveth with one hand, it can taketh with the other hand.
At present, the Death Tax forces inheritors to pay a massive 35% tax on all assets passed down above a $5 million exemption. This is one of the most confiscatory taxes, as it taxes money that has already been taxed at least once before. It disproportionately hurts farmers who own millions' worth of land, but don't necessarily have huge sums of cash. If the Bush tax cuts are allowed to expire, the tax rate will rise to 55% on everything over $1 million. Many farmers will be forced to sell parts of their family farms to pay for the tax.
Here's what Democrats think of those farmers that they are so eager to subsidize (via CQ):
Senate Democrats have dropped an estate tax provision from their extension of the President George W. Bush-era tax cuts, removing an issue that does not directly relate to their promise to continue tax breaks for middle-income earners.
In legislation (S 3393) released Wednesday, Democrats had proposed extending the estate tax at its 2009 levels, meaning estates worth less than $3.5 million would be exempted from taxation while those above that threshold would be taxed at a 45 percent top rate in 2013.
That language is not included in their revised bill, which the Senate is expected to consider next week, a Democratic aide confirmed. Absent action from Congress, the estate tax will revert to its pre-2001 parameters, with a $1 million exemption and a 55 percent top rate.
As we know, even a tiny parcel of land in some parts of the country could cost close to a million dollars. Add equipment, crops, and livestock to the mix, and a simple family farm could easily own $5-10 million in assets, but lack large sums of cash to pay off the tax. Not wanting to sell a farm that has been in the family for generations, many farmers are forced to take out a life insurance policy in order to cover the cost of the confiscatory double taxation and pass down tax free inheritance to their children.
Obviously, with government creating an artificial demand for life insurance policies covering the estate tax, the cost of premiums goes up. The life insurance industry spending millions each year in lobbying and political donations for a good reason. It's good for business.
Here's a novel idea. Why don't we get government out of private enterprise altogether? Let's stop taxing the dead and subsidizing the living.
Cross-posted from The Madison Project