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Redstate...
On Ethanol,
Conservatives Should Stand With Tom Coburn
Posted by Erick Erickson
Tuesday, March 29th
Senators Tom Coburn (R-OK) and Ben Cardin (D-MD) are out to get rid of
the ethanol subsidy. The subsidy was put into the tax code to make it
much harder to get rid of. How much harder?
Well, according to Grover Norquist, if we get rid of the ethanol
subsidy, we are raising taxes.
I’ve written before how Grover Norquist gets lots of money from groups
that lobby for special tax treatment and then, when Congress attempts
to get rid of the special tax treatment that money has bought, Norquist
screams about it being a tax increase.
It’d be quite a little racket he has going except that Americans for
Tax Reform says there is no relation between the money they get and the
“you’re raising taxes” hoo-hah they raise. It’s just businesses
supporting a like-minded ally.
Notwithstanding that, many businesses in America hire lobbyists to
complicate the tax code to benefit themselves in ways you and I are not
so advantaged and then raise hell when conservatives try to level the
playing field. Some of those same businesses then give Americans for
Tax Reform money and ATR engages in keeping the tax code ridiculously
complicated with screams of “tax increases” that are no such thing.
In fact, you and I forcibly having to give money to corn growers to
make inefficient ethanol, which then directly corresponds to higher
food prices, gas prices, and gas inefficiency is a tax increase that
elimination of the subsidy will get rid of.
Tom Coburn, Ben Cardin, Charles Koch (yes, *that* Charles Koch), and
others, want to end the ethanol subsidy. Grover Norquist who is as
wrong on ethanol as he is on FedEx v. UPS and matters relating to
Jihad, declares it to be a tax increase to get rid of the ethanol
subsidy.
In a letter to Norquist, Coburn defends ending the subsidy. He points
out:
Unfortunately, this is not the first time your organization has
defended distortions in the tax code. In 2009, you defended a $246
million tax earmark for Hollywood movie producers. You opposed my
amendment on the grounds that it was a “tax increase.” Fortunately,
dozens of Republicans who signed your pledge exercised good judgment
and common sense and voted to help pass my amendment.
Now, your organization is working to protect an ethanol subsidy the
Heritage Foundation and others have called a tax earmark because it is
a special interest giveaway targeted to a narrow group of recipients.
The Council for Citizens Against Government Waste also supports my
amendment and will consider any votes on the matter in their 2011
Congressional Ratings. As CCAGW President Tom Schatz wrote in support
of my amendment, “At a time when the nation’s debt has ballooned to
more than $14.2 trillion, members of Congress should be looking for
every viable way to cut wasteful, unnecessary and duplicative spending.”
Industry leaders like Charles Koch of Koch Industries also oppose
ethanol subsidies. Mr. Koch recently wrote in the Wall Street Journal:
“[B]ecause of government mandates, our refining business is essentially
obligated to be in the ethanol business. We believe that ethanol – and
every other product in the marketplace – should be required to compete
on its own merits, without mandates, subsidies or protective tariffs.
Such policies only increase the prices of those products, taxes and the
cost of many other goods and services.”
Likewise, in a recent op-ed on the subject, Coburn gets to the heart of
the matter:
First, the ethanol subsidy is a spending program, not a tax relief
measure. If it were solely in the discretionary budget and controlled
by the appropriators it would be unmasked as a rank cash payment.
Instead, Congress has shifted the spending program to the tax code to
protect it from being cut.
Two, this cash payment is nothing more than corporate welfare
not-so-cleverly disguised as a tax break that, in the real world, has
the impact of a tax increase.
As Pete Sepp with the National Taxpayers Union says, “the refundable
VEETC is a prime example of tax policy at its worst. Congress needs to
focus on simplifying the tax law and cutting rates for everyone, rather
than manipulating the tax law and distorting our economy.”
Coburn also points out that the ethanol subsidy directly relates to
higher food prices:
Regarding food prices, CBO said, “The increased use of ethanol
accounted for about 10 percent to 15 percent of the rise in food prices
between April 2007 and April 2008. In turn, that increase will boost
federal spending for the Supplemental Nutrition Assistance Program
(SNAP, formerly known as the Food Stamp program) and child nutrition
programs by an estimated $600 million to $900 million in FY 2009.”
Oh, and the ethanol subsidy also contributes to damaging your car
engine and decreases your fuel efficiency.
Some will say we must get rid of the ethanol subsidy and the ethanol
mandate at the same time. Let’s put them both on the table. For now,
only the subsidy is on the table.
The reality is that once the subsidy is gone, the mandate will quickly
disappear.
In the meantime, conservatives should stand with Coburn and Koch, not
Norquist and the corn growers lobby.
Read it at Redstate
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