Is ending a bad program a tax increase?

Senator Tom Coburn, who represents my natal state of Oklahoma, is probably the biggest deficit hawk in Congress.  He’s a deficit eagle, as fiscally responsible and economically conservative as they come.  But he’s taking flack from conservative activist Grover Norquist and others for violating the no new taxes pledge that most Republican lawmakers have taken.  Why?  Because Sen. Coburn is spearheading an effort to drop ethanol subsidies, which include a tax credit for that industry.

Most conservatives consider the ethanol subsidies to be a huge waste of money, an outdated concession to environmentalists, though farmers like that industry because it buys up so much of the corn crop, sending prices sky-high.  It sends the price for other commodities sky high too, since many farmers are cutting back the production of wheat and other crops in order to plant more corn, which cuts the supply of those other commodities.  But liberals also consider them a waste of money, a payoff to big corporations.  And there is a consensus that the subsidies cause actual harm to poor countries, since turning food into fuel and the consequent high food prices means more hunger for the poorest of the poor.  And even environmentalists now oppose the ethanol option, since it burns more fossil fuels to produce it–all of those tractors in cornfields–than it replaces.  And in this time of economic travail and crippling federal deficits, the subsidies are costing taxpayers $6 billion per year.

So why not kill the beast?  Because part of the subsidy is in the form of a tax credit, so repealing it would be a tax increase, and 95% of Republican lawmakers have promised not to vote for a tax increase.

See Coburn prompts Senate vote on ethanol subsidies – The Washington Post.

Once again, in politics as in religion,  we see the spirit of legalism, which violates the spirit of the law in order to keep the letter.

Can common sense be restored to our government?  Can this country even be governed in today’s political climate?


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