Posts tagged with: taxes

In one of this week’s Acton Commentaries, Ray Nothstine and I juxtapose a static, sedentary dependence on government subsidies with a dynamic, entrepreneurial spirit of innovation.

The impetus for this short piece was an article that originally appeared in the Grand Rapids Press (linked in the commentary). I have two things to say about these stories and then I want to add some further reflections on the world of agricultures subsidies.

First, I found the article’s “hook” to be quite shoddy and lame. The blatant attempt to “shock” the reader into a reaction of disgust that a billionaire like Dick DeVos, yes, “that Dick DeVos,” got a whopping “$6,000 in federal farm subsidies from 2003 to 2005.” That’s roughly $2k a year for three years.

Unsurprisingly, DeVos’ spokesperson didn’t know anything about it. It’s ludicrous to think that a guy with as much on his plate as Dick DeVos would have any time for what is essentially pocket change for a billionaire. Does the fact that DeVos got a subsidy even though he campaigned on eliminating government waste make him a hypocrite?

Judge for yourself, but I think these payments say more about the government’s inefficiency and waste than they do about DeVos’ integrity. People of all income brackets pay tax professionals to maximize their returns. For the very wealthy, it’s simply a process that’s on a bigger scale, that’s much more thorough, and with many more loopholes than when you or I go to H&R Block. The more diversified your holdings, the more likely there are a plethora of tax breaks for you to exploit. The breathless lede to this story was simply off-putting to me, especially given the rather clear political undertones of the insinuations.

“Simplify, man.”

What’s the real lesson? As a recycling hippie once told The Simpsons‘ Principal Skinner in a quite different context, “Simplify, man.” Simplify the tax code and eliminate all these special interest loopholes.

But the complaint about the story’s hook is really a minor quibble compared to my second point. In a companion piece, Lisa Rose Starner, executive director at Blandford Nature Center and Mixed Greens says that farm subsidies are essentially about “social justice.” That’s right, subsidies are about social justice. They’re about the social injustice of subsidizing a product so that people from poorer nations around the world, who would like to do more than simply engage in subsistence farming, can’t compete in a global marketplace because prices are artificially deflated. So, our subsidies are feeding the rich at the expense of the poor in more ways than one.

Of course, the pat response is that other nations are subsidizing too, so our subsidies are just leveling the playing field. To be sure, the world of agricultural business is a complex one, as many of the commenters on our piece point out. Direct farm subsidies are just one thin slice of the government’s intervention into agriculture. Perhaps they’re the most obvious, but they may also not be the most insidious. As one astute reader wrote to me, “The web of market interference in ag is broad and complex.”

Simplify, man.

Update: The Detroit News ran a version of the original piece here.

Blog author: kschmiesing
Thursday, November 8, 2007

Sophisticated followers of politics such as the readers of PowerBlog will not be surprised by this story, but I’ll bring it to your attention anyway. The US House recently passed a bill that includes a dramatic tax increase on mining businesses. Supporters argue that the tax helps reign in the environmentally abusive mining industry. Higher taxes. Environmental concern. Senate Democrats would be scrambling to get on that bus, right? One problem: Majority Leader Harry Reid is from Nevada, whose economy depends heavily on the extraction of minerals and metals.

It reminds me of one of Hillary Clinton’s recent controversies, the ethanol flip-flop. Her spokesman explained: “She has always been a supporter of ethanol except for a time when there was evidence that New York would be hurt economically.” No doubt. If only pro-tax, “pro-environment” politicians would be equally sensitive to the economic ramifications of their policies even when they’re not immediately obvious to their own constituents.

Blog author: jarmstrong
Wednesday, May 23, 2007

Both of our major political parties have missed what seems so obvious. One says that we need more tax cuts to strengthen the economy. This is correct. The problem is that they are not willing to also make serious budget cuts. That party has spent more than any previous administration. The other political party wants to expand federal government by spending more of our money by raising taxes. The first plan helps the economy in the short run but not in the long term. The second is an even worse disaster I think.

Look, budget deficits are not a good thing, at least not in my simplistic understanding of economics. What individual would decrease their revenue, at least for the short term, and then also increase spending, for the long term? I know, cutting tax rates generates more money in the long run and thus the government benefits. I agree with that proven principle. Ronald Reagan advanced it and to the astonishment of all his enemies it worked.

What I do not think is a proven fact is that you can keep raising government spending, so as to increase deficits, and not someday have to "pay the piper." The late Milton Friedman, a hero of mine, continually noted that the burden of government is best measured by the level of our spending, not by the level of our tax rates. John Stossel pointed this out very clearly in his syndicated column that appeared in my paper today.

Here is the bad news. Your FICA and Social Security taxes currently exceed the expenditures of these programs. But by 2017 or 2018 this will all change when the baby boomers start to retire in massive numbers and begin to drain the system. Stossel gives President Bush some credit for the falling deficit because of his tax cuts. This plan has shrunk the deficit, at least to some extent. Cutting taxes and cutting deficits are not opposites. Both can and should be done. There is enough blame to go around in Washington. I want to decrease tax rates even further but I also want to seriously decrease federal spending.

John Stossel notes that the anti-Federalist writer Melancton Smith (1787) wrote: "All governments find a use for as much money as they can raise." That is the real issue and few will admit it, whether Republicans or Democrats. One party generally does a better job with this issue than the other but the difference is more one of degree than of deep and true principle, or so it seems to this amateur. I am open to seeing this differently but I think the obvious is pretty obvious. We need to grow the economy, allow people to keep their own money so they can spend it and create new jobs, and limit the role of government in solving every social ill we face. I believe there are some pressing issues that demand federal solutions. I am not a libertarian Luddite. But I also believe that at some point we had better face this deficit issue and slow spending or we will soon face financial and social chaos like we have never imagined.

John H. Armstrong is founder and director of ACT 3, a ministry aimed at "encouraging the church, through its leadership, to pursue doctrinal and ethical reformation and to foster spiritual awakening."

Blog author: jballor
Friday, March 9, 2007

Some of Michigan’s economic woes are pretty well outlined in an editorial in today’s OpinionJournal, “”.

It begins by noting a symbolically important defection:

Comerica Inc. was founded in 1849 in Detroit and the Detroit Tigers play in Comerica Park, but this week the bank holding company announced it is moving its headquarters to Dallas–where, it said, the bigger growth opportunities are. Consider it one more vote of confidence in the state the national expansion forgot, and especially in Michigan Governor Jennifer Granholm’s economic agenda.

Read the rest here.

Michigan’s unemployment rate was 6.9% in January, the worst in the US, and has been one of the worst in the nation for about the last two years.

As a side note, the actual website is “coming soon.”

Blog author: jballor
Wednesday, December 27, 2006

Our series on the year in review continues with the second quarter:


“Surprise! Evangelical Politics Isn’t Univocal,” Jordan J. Ballor

So from issues like immigration to global warming, the press is eager to find the fault lines of evangelical politics. And moving beyond the typical Jim Wallis-Jerry Falwell dichotomy, there are real and honest disagreements among evangelicals on any number of political issues….


“How Do You Spell Relief?” Jordan J. Ballor

If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely?…


“There are more environmentalist misanthropes than you think,” Jay Richards

But anyone who reads widely in the environmental literature knows that suggestions such as Pianka’s are not uncommon. In fact, the desire for mass human death follows logically from the anti-human beliefs of some radical environmentalists. Some are more consistent in their beliefs than others. But Pianka is by no means the only person to express such opinions….

Blog author: jballor
Thursday, December 21, 2006

Filing your taxes just got a little more complicated. The IRS recently announced new guidelines for charitable deductions to be introduced for the 2007 tax year. Beginning next tax season, “taxpayers must provide bank records or other information when claiming deductions for charitable donations of money.”

These records can include credit card statements and canceled checks. And in addition, taxpayers “may also submit a written communication from the charity with the organization’s name, the date of the transaction and the amount of the contribution.” A number of charities that I contribute to already provide me with year-end statements, so just be ready to pass that paperwork along with your return.

HT: Zondervan>To The Point

Blog author: jballor
Wednesday, September 20, 2006

NBC Nightly News has long had a special feature titled, “The Fleecing of America,” which investigates various instances wasteful spending by government officials.

To get a visual clue about the massive size and diversity of the federal budget, check out “Death and Taxes”, the 2007 edition, “a representational graph of the federal discretionary budget. The amount of money that is spent at the discretion of your elected representatives in Congress. Basically, your federal income taxes.”

The website also notes, “Don’t forget about the national debt! It’s the circle so big it doesn’t even fit in the box.”

I recommend printing out the graph in landscape orientation on ledger-sized paper and posting it somewhere near your desk. You’ll get plenty of questions from curious passers-by.

(HT: Mises Economics Blog)

Update: In response to the limitations of the graph noted by Tim in the comments section below, it should be noted that this graph does only refer to discretionary spending. This does not include either the mandatory spending that falls under the federal budget each year or the various entitlement programs, such as Social Security, which are “off budget.” With this in mind, of course, the pork in the graph above is the good news, relatively speaking.

With regard to speculation as to why the makers of the budget graph chose only to look at discretionary spending, I quote this Reason article: “Because discretionary spending can theoretically be zeroed out each year, it is generally regarded as the clearest indicator of whether a president and Congress are serious about reducing government spending.”