Coburn vs. Norquist

[^_^ 5,021]

The Senator is right on ethanol and, in this case, on tax subsidies.

Senator Tom Coburn of Oklahoma has a fighting chance to begin reforming Washington's bonehead ethanol policy. That is unless one prominent conservative organization manages to sabotage his effort.

Mr. Coburn is collecting votes to take down the Volumetric Ethanol Excise Tax Credit, which ladles out roughly $5 billion a year in benefits to petroleum refiners that blend ethanol into gasoline. The credit flows through to ethanol producers, who can charge some 45 cents a gallon more than the market would otherwise bear.

Keep in mind this is merely one leg of the three-legged government stool propping up ethanol, which couldn't compete without it. U.S. producers benefit from a 54-cent a gallon tariff on foreign ethanol from the likes of Brazil. They also enjoy a federal mandate that requires the production of 13.95 billion gallons of alternative fuels this year, and 36 billion gallons by 2022. We can't think of another industry that benefits from so much political favoritism.

Farm state Senators led by Iowa's Chuck Grassley are naturally doing their best to beat the Coburn amendment, which has been gaining support on the left and right. So it's unfortunate, and more than a little odd, to see Mr. Grassley invoking none other than Grover Norquist's Americans for Tax Reform as an ally in accusing Mr. Coburn of promoting a "tax increase."

Our readers know Mr. Norquist as the plucky author of the no-new-taxes pledge, which has helped to make tax increases a red line in Republican politics. In a letter to Mr. Coburn, a deputy of Mr. Norquist writes: "Repealing the ethanol credit is the right thing to do, but other taxes must be reduced in the same legislation by at least this much to prevent a net tax increase."

We understand the larger principle that Americans for Tax Reform is trying to defend. Axing every credit, exemption and deduction in the tax code, while leaving tax rates high, would result in a higher general tax burden and more money for Washington to spend. A true tax reform would trade such tax loopholes and subsidies for lower rates.

But the compelling taxpayer interest in this case is to begin to dismantle the failed policy that is driving up the cost of food and fuel with no benefit for the environment or U.S. energy security. Says Mr. Coburn: "Continuing to issue blanket defenses of all tax expenditures is a profoundly misguided embrace of progressive, activist government and a strategy for tax complexity, tax deferment, excessive spending and unsustainable deficits."

Readers may be familiar with the Earned Income Tax Credit, which sends checks to people who don't pay federal income taxes. In his reply to Mr. Norquist, Mr. Coburn wonders if even this program would receive conservative cover. "Under your logic, reducing provisions in the code such as the Earned Income Tax Credit would constitute a violation of your pledge [to oppose tax increases] unless it was 'offset' by another so-called 'tax cut,' such as an expansion of the ethanol subsidy. That is hardly sound conservative economics," writes Mr. Coburn.

We think the Senator wins this bout by a policy knockout. Ethanol is such a preposterous example of corporate welfare that any conservative should be embarrassed to support it.

http://online.wsj.com/article/SB10001424052748703712504576233053869526920.html?mod=googlenews_wsj

[Pooky 3,825]

Ethanol is such a preposterous example of corporate welfare that anyone conservative should be embarrassed to support it.

+1

[Usui Takumi 1,562]

+1

You didn't hit the +1 lol. As of my post AJ is still a zero.

Edited April 20, 2011 by Sousuke

[Pooky 3,825]

You didn't hit the +1 lol. As of my post AJ is still a zero.

If I had wanted to +1 the whole article, I would have

[one...two...tree 2,762]

[^_^ 5,021]

AJ is still a zero.

[Usui Takumi 1,562]

Now you are a one lol.

[^_^ 5,021]

Now you are a one lol.

w00t!

[Peikko 1,575]

w00t!

I gave you one too

I agree that the ethanol subsidies are madness. A stupid lame arsed non solution to a serious problem.

[^_^ 5,021]

I gave you one too

I agree that the ethanol subsidies are madness. A stupid lame arsed non solution to a serious problem.

Thank you. You are awesome.