At Some Point You've Been Subsidized Enough

Image via IowaDawg

I have to disagree with our good friend at The Lonely Conservative on this idea from the Wall Street Journal:

It’s so ironic that President Obama goes out on the stump day in and day out bashing the wealthy while providing them with subsidies that add up to hundreds of billions of dollars every year. Stephen Moore and Walter Williams propose The Millionaire Subsidy Elimination Act. Their intention isn’t to bash millionaires, and they aren’t calling for higher taxes – only an end to the transfer of wealth to those who don’t need it. Unfortunately, it’s a bipartisan problem.

The much bigger fiscal drain from the wealthy is on the federal expenditure side of the budget ledger: tens of billions each year in grants, loans, subsidies, guarantees and benefits pocketed each year by wealthy Americans as individuals and firms. Any campaign to downsize big government will only succeed if the needed deep cuts in spending are deemed by voters as equitable. In an era of $1 trillion-plus deficits and a $15 trillion national debt, we would like to think that a national consensus could be reached to eliminate handouts to individuals and companies with net incomes above $1 million.

[snip]

Last month Sen. Tom Coburn (R., Okla.) put out a report, “Subsidies of the Rich and Famous,” that identified tens of billions of dollars of handouts to the wealthy. His report included farm payments under government programs to rock stars like Bruce Springsteen and former professional athletes like Scottie Pippen.

Rather than stand up against all this, Republicans recently allowed the Federal Housing Administration to guarantee home mortgages of up to $750,000. Not many in the bottom 99% can afford such homes.

[emphasis mine]

Sorry, I’m not keen on this idea.

The weird and perverse consequences of implicit marginal tax rates (income plus subsidies minus taxes) are already bad enough. Let’s not make them worse.

And let’s remember that people with high incomes aren’t always “rich” -- and wealthy people sometimes have low incomes.

End government subsides? Yes.

Target some arbitrary income bracket for poetic justice? No.

This comes dangerously close to Obama's “At some point you’ve made enough money" mentality.

Walter Williams is usually right on target. I’m surprised he has adopted the language of the Occutards to promote this idea.

We need to get away from the idea that government-funded “grants, loans, subsidies, guarantees and benefits” are appropriate in any form, even when they’re selectively redistributed like Marxist candy to the middle class. From that point of view, The Millionaire Subsidy Elimination Act falls woefully short.

Recommended reading:

The Dead Zone: The Implicit Marginal Tax Rate

Look who pays for the bailout: Meet the Henrys

Poor or Low-Income?

Occupy K Street

The freegans and rabble-rousers of "Occupy Wall Street" would do well to direct some of their angst away from the mysterious "1%" and toward the well-compensated whores on K street who fuel the juggernaut of cronyism that rides roughshod over our anemic economy.

Via Lonely Conservative:

Here’s a big shocker. According to Bloomberg, the US city with the highest household income is Washington, DC. So that’s where all the stimulus has gone!

Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.

The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.

[...]

It gets better from there. One Chamber of Commerce official was quoted, saying “Wall Street has moved to K Street.”

As true now as it ever was:

"In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden."