Feds Pay Farmers to Till the Desert

No, this headline and story is not brought to you by The Onion.

The latest proof that there’s nothing more permanent than a temporary federal program:

As drought forces families in the West to shorten their showers and let their lawns turn brown, two Depression-era government programs have been paying some of the nation’s biggest farms hundreds of millions of dollars to grow water-thirsty crops in what was once desert.

My sympathy for this farmer lies somewhere between that which I have for Bernie Madoff and Ted Stevens:

Jim Hansen, a 69-year-old cotton grower in California’s Central Valley, said his family business would crumble if the government took away low-cost water and the nearly $1.7 million in crop payments he received in 2007 and 2008.

For more on the insanity that is federal farm policy and why the USDA needs to be downsized and/or done away with, click here.

Dust Off Your Tinfoil Hats

It’s official. Everyone supportive of federalism and/or upset about taxes, etc., is now considered a potentially dangerous “rightwing extremist” by Homeland Security.

From all around the web:

A footnote attached to the report by the Homeland Security Office of Intelligence and Analysis defines “rightwing extremism in the United States” as including not just racist or hate groups, but also groups that reject federal authority in favor of state or local authority.

Freedom of Speech Under Attack in Ecuador

Freedom of speech is coming under attack again in President Rafael Correa’s Ecuador. Last year Correa sent armed soldiers before dawn to some 200 private businesses, including three television stations, on the pretext that the owner (an unpopular businessman and critic of the government) had not paid money owed to the government.

It was never clear why the government had to place its own people in charge of running those businesses rather than go through the usual auditing or bankruptcy procedures. The result was to reduce criticism of the government at those TV stations and send a message to the rest of the media. At the time, Gabriela Calderón, Cato’s Ecuador-based editor of our Spanish language web site, www.elcato.org, hosted a weekly talk show program on CN3 TV station with two other market-liberal commentators. The station was one of the ones taken over, after which, Gabriela and her colleagues were told that from then on, their show had to “balanced” and include pro-government spokespersons. Gabriela and her colleagues quit in protest and the show went off the air.

Now Correa is enforcing a law that explicitly violates freedom of speech. Ecuador has been an officially dollarized country since 2000, before Correa came to power. Years of high oil prices have financed an explosion in government spending. With oil prices down, Correa’s populist project is quickly running out of money and people are speculating that he will de-dollarize Ecuador, allowing him to run the printing presses. However, it is illegal in Ecuador to suggest that the country will de-dollarize, as that would violate the law against spreading rumors of devaluation. The first victim has been Rómulo López Sabando, an attorney and long-time columnist for the Diario Expreso. On March 24 he wrote a column indicating that the government is planning to dedollarize. For committing that crime, the government ordered his arrest. He has been in hiding since.

It’s a very good bet that the government will de-dollarize this year, yet the Ecuadorian press has been silent on the matter. As the law victimizes the press and, more generally, Ecuadorian democracy, López remains in hiding and the arrest warrant still holds. Will Obama and other hemispheric leaders meeting at the summit of the Americas later this week denounce these abuses?

Pirates as Tax Collectors?

[Co-authored with Ilya Shapiro.]

As we suspected, with world attention focused on the just-concluded piracy standoff, it was only a matter of time before someone would write something like this: “the right way to think about this problem is that pirates are imposing a tax on shipping in their area. They are a bit like a pseudo-government.” Perhaps the Mafia too –- “pay, or we break your legs” –- is like a pseudo-government.

The difference between a tax and extortion is not subtle, even if it seems to have escaped the cited authorities, including Noam Chomsky. A tax, at least in principle, and most often in practice, is a charge for a service rendered –- not necessarily a wanted or an evenly distributed service, to be sure, but most relevant here, protection from third-party pirates and other lawless predators, domestic and foreign. By contrast, a pirate’s shakedown puts the victim to a choice between two of his entitlements –- his freedom and his property. That distinction –- again, hardly subtle –- is what prompted us to leave the state of nature. Those who would like to return to that state will find it waiting for them on the horn of Africa.

Our Troubling Tax System

The U.S. tax code gets more complex every year. It violates civil liberties and, left unchanged, will leave the United States at a powerful competitive disadvantage in years to come, say Cato scholars in this new Cato video.

According to tax expert Chris Edwards, the tax system is growing at startling levels — there are now about 70,000 pages of tax regulations and $300 billion in compliance costs — and it’s only going to get worse.

The Beginnings of Earmark Transparency

Under reforms announced in March, House members have to publicly declare the earmarks they’re requesting from the Appropriations Committee. Most of the requests have now been published and WashingtonWatch.com has assembled a state-by-state catalogue of links to Members’ earmark requests.

Getting earmark requests published is progress. Getting them published in uniform, machine-readable formats would allow the public to do really thorough oversight of all the projects that Members of Congress think federal taxpayer dollars should go to.

In December, we had a policy forum called “Just Give Us the Data!” where we explored some of the current issues in government transparency.

Federal Tax Rates

Conveniently timed as Tax Day approaches, the Congressional Budget Office has released new data on the taxes paid by each income group. The CBO data includes federal income taxes, payroll taxes, and excise taxes, which amounts to almost the entire federal tax grab.

The CBO calculates tax rates by quintile from the lowest-earning to the highest earning households. These tax rates are simply total federal taxes paid by the group divided by total income earned by the group.

The chart makes clear that we have a very graduated or redistributive tax system, which some people call “progressive.” President Obama doesn’t think that the 25.8% rate paid by the top quintile is progressive enough, so he plans to penalize that group with an income tax rate hike.