Sunday, December 16, 2007

And if we're still looking for $50 billion to fix the AMT, consider the recent farm bill that both houses are working on. The Senate on Friday approved a $286 billion farm bill with an election-year expansion of subsidies for growers and food stamps for the poor.

$286 billion to EXPAND subsidies. For those who don't know, one consistent sure-fire result of government subsidies is higher prices. Look at the current price of corn and you'll understand. This is the result of government subsidies in order to increase ethanol fuel. And Congress wants to spend nearly $300 billion to EXPAND these subsidies to other crops like wheat, barley, oat and soybeans. Just wait, the prices for all of these will soon begin to climb the moment this legislation is made into law.

And before you start advocating for the average American farmer, you should know that the vast majority of these subsidies don't go to the poor Midwest farmer working the family plot of a few hundred acres. Oh no. Most of this money goes to major corporations that have bought up these farms all over the country. For those who curse "big oil", you may also want to take a close look at "big corn". You may be surprised at what you find. Check out this article on Archer Daniels Midland, a company that raked in $236 million in corn profits in 2005.

But the Senate wants to limit this. They propose capping payments to anyone who makes more than $750,000 a year. The House wants to cap at $1 million. Bush wants that cap to be $200,000. Apparently that's unacceptable to Congress. Funny, I thought the Dems were opposed to the wealthy. I guess when it comes to "big farming" that's a different story.

I'm sure if Congress adopted Bush's proposal they'd be able to find the $50 billion for AMT relief. Remember, this is a $300 billion bill. Obviously, subsidizing major farming corporations is much more important than fair taxes for the middle class. Who knows, if Congress fixed the AMT there may not be as much of a need for food stamps for the poor.

12 comments:

Kristina said...

Many of these small family owned farms would not need to be subsidized at all if it weren't for the inheritance tax. The Dems want to bring it back and it really cripples family owned farms. Then they try to "fix" it with subsidies. All that does is cripple them further as they come to depend on the government more and more.

John Washburn said...

"All that does is cripple them further as they come to depend on the government more and more."

Kristine, this is such an excellent point. I'm glad you brought it up because in my mind this is the only reasonable explanation for the seeming insanity of the Democrats' actions. They say they want to help American farmers. Obviously this is a LIE. As you pointed out, if they wanted to help farmers they would in no way advocate for the death tax. Instead, they pile government subsidies on farmers that, as we all have seen, do nothing good. Why? Not to HELP farmers, but to make them more dependent on the government. People who depend on the gov't are virtually guaranteed to vote Democrat - the party of entitlements.

This is one reason why I view people who consistently vote Democrat as naive, self-destructive and overall foolish.

Thanks for the comment

SNAKE HUNTERS said...

Not sure that I should comment; I have no real understanding of the
root complexities, so I'll shoot from the hip with my best quick-draw:

FIRST, I would prefer to Spend Our Dollars on American Big Corn, Big Soybean, Big Coal, Big Oil Shale, Bio-Deisel Sugar Beets, whatever top science says is the Best Option Now, than to continue to Enrich O.P.E.C. @ $100 per barrel Oil, which will hasten our slow retreat from All Involvement in World Affairs & World Trade. That's Custer's Last Stand, Bunker Mentality!

SECOND: Down-Size Production of Super-sized Pick-ups & RV's by 90%, give auto-makers an incentive to build 40 TO 50 mile per gallon run-a-bout family vehicles, and extinguish that thirst for power & worthless speed. TAX INCREASE the price we pay at the pump. You heard
me right, O.K.? Let's encourage our Elite Limo-Liberals to buy a Mo-Ped, or take up Jogging!
__________________________________
Implement Gas Rationing Right Now, as we did in WWII. __________________________________

Libs Chant for 'Change', let's encourage it. A "New Direction" for
Hollywood & San Francisco? Great!
>>
But, Where in the world do we find the Leadership to get it done? Gingrich isn't running for office, and Hillary wants to bury us with
"free" health care. Humbug!
>>
And you pin-heads, stop your subscription to those Tabloids and Movie Mags...you're killing all the trees in our forests! Join a fat-farm, burn off that excess! Take up Yoga, stop pandering negative politics! Scrape those dumb bumper-stickers off your car. Read some WWII History! Get some soothing music, and...
Toss your rap-crap collection.
Your neighbor will love it!

If You want change, start with Self. Help a 'less-fortunate' family, Stop the whining; Become An Asset, You might like it.

Accentuate The Positives! reb
__________________________________
www.lazyonebenn.blogspot.com

The Loop Garoo Kid said...

You know, I was willing to sit this one out, but two of you need to get a few facts straight. That would be you Kristina and you Doctor.

You bought into the anti inheritance tax propaganda, hook, line, and sinker. The are 300 million Americans. Last year, I believe that only 2,200 estates were subject to the inheritance tax. The individual exclusion amount is $2 million. The exclusion amount for couples is $4 million.

Plus, assuming the familiy farm owned by a single individual has a value of over $2 million, which I am certain some do, what occurs after the death of the owner may be mitigated by spending a few thousand dollars to consult an atty who is an expert in estate planning.

So, if you are going to raise the hue and cry that the family farms are being sold to pay estate taxes, you are crying wolf, when wolf there be none.

The two weathiest Americans, Warren Buffet and Bill Gates, favor the inheritance tax.

Now on to farm subsidies. Do these subsidies inure more to the family farm or to Archer-Daniels-Midland?

reb,

I agree w/ your suggestions and raise two points. I believe that the majority of oil that we import is from Canada and Mexico.

Secondly, liberals are not the only people who ride in limosines, but you are spot on about the SUVs.

I live in a particularly red portion of Colorado. Everybody owns an SUV but few really need them.

Regards.

John Washburn said...

Loop, if we bought into a lie, then you have similarly bought into the "only tax the rich" philosophy. Liberals say they only want to tax the rich, but that's not reality. There is no such thing as a tax liberals oppose, regardless who gets victimized by that tax.

The truth is many family farms are valued at over $2 million. Have you seen the value of farmland in the Midwest?

And I realize the two wealthy men you mentioned support the death tax, probably because they won't have to pay it. As you said, all it takes is the right lawyer/accountant to skirt the issue. The very wealthy can do this, middle class folks can't.

I believe the citizenry have a responsibility to fund the gov't, but I feel taxes should be FAIR. That's simple enough. Inheritance has already been taxed once, when the money was made. It is simply unfair to tax it again.

The Loop Garoo Kid said...

BS Doctor pure and simple. You cannot tell me that an individual sitting on agricultural real estate worth seeral million dollars cannot afford several thousand to consult an attorney so as to protect his or her assets.

If you want to argue that the tax code is too arcane and complicated, you wil be preaching to the choir.

Perhaps you should consider the reasons why our English, and other European, forebears settled this continent. It was, inter alia, to escape the oppression of landed gentry. The abolition of the inheritance tax and the Rule Against Perpetuities lays the foundation for the creation of a landed class.

We already have a class of uber rich in this country paying a disproportionately low share of taxes. I mean if you can pass $2 million free and clear to your inheritors, don't you think you could figure out a way to either avoid or pay the tax on the rest.

Get real, Doctor, the uber rich don't get victimized. Once again, you merely reacted w/ the "liberals love to tax, blah, blah, blah.

Do the research. Catalogue the family farms that are being lost and you will find the numbers small and those that were sold, could have been saved w/ a little estate planning.

Regards.

John Washburn said...

"I mean if you can pass $2 million free and clear to your inheritors, don't you think you could figure out a way to either avoid or pay the tax on the rest."

Sure, if you're willing to sell off some land, which is what their "uber rich" fortune is tied up in.

"Catalogue the family farms that are being lost and you will find the numbers small and those that were sold, could have been saved w/ a little estate planning."

So if someone loses their farm due to taxes, it's THEIR fault and not the government's for over taxation. That's interesting. I wonder what you think about Katrina. Were the victims to blame or was it the government? How about Ruby Ridge? Waco?

And if it's SOOOO easy to avoid paying the death tax, what's the point in having it at all? The "uber rich" can most definitely afford enough counsel to get around it. And you feel the middle class can afford to avoid it as well. So why even have it? Seems to me, if we follow your logic, all it takes is a few grand to avoid paying it. And, in your opinion, just about anyone can afford that.

I don't follow your logic.

"The abolition of the inheritance tax and the Rule Against Perpetuities lays the foundation for the creation of a landed class."

That is quite a stretch! You feel abolishing the death tax will somehow lead to a caste system, where we are either of Noble birth or simple commoners? Please explain how you come to such a conclusion. I'm sure my readers are dying to hear this.

The Loop Garoo Kid said...

Wake up and smell the coffee Doctor. Stop reacting and learn about the subject of your comments.

Th eunber don't own family farms.

Ever hear of a term life insurance policy? You die, it pays, your heirs use the mnoney to pay the taxes.

I appreciate the fact that you are not a lawyer and I appreciate your comments about medicine. If you are going to comment about law cite the facts.

Regards.

Kristina said...

Loop, let me give you some solid numbers to try to give a better idea of what we're talking about.

I live in the fastest growing county in Kentucky. Because of this, acreage is worth at the low end $36000 an acre. So, if you own 111 acres, your estate is worth 4 million. Most farmers will tell you that it is almost impossible to produce enough to survive on that small an acreage. Yet just that acreage is enough to put them over the 4 million dollar limit you mentioned. At the high-en we're talking about $86,000 an acre. That means that you could only own 47 acres in those areas. Did you see that? 47 acres Also, those figures aren't counting houses, barns, tractors, livestock, crops that are already planted, etc....

It is easy to come up with a $4,000,000 estate. However, how many of these people can find the extra money to pay an estate attorney? Also, while more could, now, many are having to climb up from under the debt of their inheritance.

Finally, I have to say that I would like to own that much land just to own it. I like the land. However, I wouldn't consider myself to be "landed". When this country was started, only "landed" gentlemen could vote. That is no longer the case. Considering that, this will not become a "landed" society.

Kristina said...

Loop, they shouldn't have to pay the tax. The tax has been paid. You are taxing the same property twice. Why should people have to take out "tax" insurance. Also, have you just acknowledged the fact that family farms are taxed?

The Loop Garoo Kid said...

kristina,

the situation you describe is not unique but is happening everywhere where there is growth. Farms and ranches are turing into subdivisions. Some landowners are merely cashing in.

For those who choose not to develop, their recourse is have the land asssessed as agricultural land which greatly lowers the taxes although this requires the cooperation and vision of local government, alas may of whom are in thrall to or in the pockets of the national and multinational blow and go developers.

The free market advocates would probably argue that the family farm in a developing area is simply no longer viable. These farms may and do survive w/ a little regulation and a little planning.

Again, whereas I do not deny what is occurring in your neck of the woods, how many farms are being lost to inheritance taxes b/c rememeber there are sate inheriatnce taxes in some states.

I think you will find the number is few. I think you will also find the number would be fewer had the owners done some estate planning. A stitch in time...

reb,

The abolition of the Rule Against Perpeuities is more insidious than the abolition of inheritance taxes. I am not at the office but as I recall it states: "No interest is good, unless it must vest, if at all, within 21 years of some life in being."

It prevents the establishment of perpetual trusts. So think about it. the abolition of these two laws could easily lead to the establishment of a means by which uber rich could control, let us say the most desirable portions of any locale including Oak Ridge, forever. Market forces will continue to work to be sure but there is a reason why real estate is one of the true forms of wealth. They aren't making more of it.

Regards.

John Washburn said...

Loop, it doesn't require full knowledge of the law to recognize governmental ripoffs and unfair taxes. So far, you've advocated FOR the estate tax with the following arguments:

1) Only the rich get taxed
2) The middle class can avoid the tax with only a few thousand dollars paid to an estate attorney
3) Several states have estate taxes, so why shouldn't the federal government? (this one really puzzles me)
4) The tax can be paid with a life insurance policy (I always thought life insurance was meant to replace lost income of the deceased, apparently it's really meant to cover the government's tax of one's death)
5) without the estate tax, we run the risk of reverting to a caste social system

With respect, none of these make sense. And when we challenge you on them you simply brush us off with a "you-don't-know-the-law" dismissal. I asked you to explain how banning the death tax would revert us to a "landed" society. I asked why have a death tax if it's so easy to get around by just hiring a lawyer for a few thousand dollars of estate planning. We pointed out how the rising value of property puts many middle class farmers into this unfair tax bracket.

You provided no answers to any of these legitimate counter-arguments, only saying "you don't know the law" and providing a recommendation that anyone falling into this category should have a hefty life insurance policy to pay the taxes when they die.

So, I admit a certain ignorance of the law, but I still don't see the pertinence of any of your arguments. You have done nothing to convince anyone here that the death tax is good for America. Please explain to us all why the death tax is necessary, why banning it will revert us to a landed society, and why it's appropriate to double-tax people who simply can't afford it.