Normally, I generally agree with Grover Norquist’s calls to reduce the size of America’s bloated government. However, this recent article in The Economist made me furious.
Mr. Norquist, founder of Americans for Tax Reform (ATR), an organization whose raison d’etre is to reduce the size and complexity of goverrnment, is against ending the ethanol tax credit.
The tax credit Norquist opposes cutting is the same tax credit that supports a commodity that takes almost as much energy to produce as it provides in fuel. Ethanol also consumes a vast amount of the country’s corn production, which raises prices on food globally. As the world has seen in the Middle East, rising food prices have consequences.
Yet, Mr. Norquist thinks it is fine to spend $6 billion a year on ethanol subsidies. Hell, even Al Gore is against ethanol subsidies. Surely, that has to account for something.
I understand Mr. Norquist’s concern that the net effect of eliminating the tax credit will be a $6 billion increase in government revenue. He believes that the government should offset this credit with $6 billion in tax relief elsewere. This would make ending the subsidy revenue neutral.
While I agree that finding a way to make ending the subsidy revenue neutral is better, I do not believe it is a good argument for keeping that particular subsidy outright.
Let’s face it, the ethanol subsidy is the Boss Hogg of pork and America needs to end it.