By what authority does the President have the power to forgive student loan debt? Our Constitution grants Congress the power to tax and spend, not the President, and surely the forgiveness of student debt is spending money. In addition to the President’s action being unconstitutional, forgiving student debt, even for those with incomes below $125,000 per year, will mostly benefit people with above average incomes. It’s also a slap in the face to those who have already paid off their debt or who saved and never went into debt. It also sets a terrible precedent. Students who go into debt in the future will be encouraged to not pay their debt in hopes that it will be forgiven. Democrats should not feel good about this. At some point in the future there will be a Republican President who will have the same power.
Category Archives: subsidies
Government incentivizes creation and disposal of CO2
Here is a letter I just sent to The Des Moines Register:
Thank you for reporting on the proposed carbon sequestration project by Summit Carbon Solutions. (“Iowa company plans meetings on pipeline” 8/30/21) This company exists only because they will receive tax credits for each ton of carbon sequestered. And the carbon will come from ethanol plants that exist only because of federal and other tax incentives and the force of government which requires the blending of ethanol into gasoline. So taxpayers and consumers are paying for both the creation and disposal of this carbon. What a shame.
Paid time off to get vaccines?
This is from a White House Fact Sheet:
“Thanks to President Biden’s American Rescue Plan, a paid leave tax credit will offset the cost for businesses and nonprofits with fewer than 500 employees for up to 80 hours (i.e. 10 work days) up to $511 per day of paid sick leave offered between April 1 and September 30, 2021. This tax credit will allow these employers to provide paid leave for employees to get a COVID-19 vaccination and for any time their employees may need to recover from that vaccination at no cost to the employer. ” Here’s the link: https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/21/fact-sheet-president-biden-to-call-on-all-employers-to-provide-paid-time-off-for-employees-to-get-vaccinated-after-meeting-goal-of-200-million-shots-in-the-first-100-days/
The tax credit can also be taken by self-employed people on their income tax return.
Wait, there is more in the Fact Sheet:
“Building on today’s IRS release and the American Rescue Plan’s provisions, the Administration is committed to expanding paid leave more generally. That’s why the tax credit in the American Rescue Plan will enable employers with fewer than 500 employees to claim up to $17,110 for 14 weeks of paid leave for each impacted employee not only to get vaccinated, but also to take time off if they have COVID-19 symptoms and are going to the doctor; are getting tested for COVID-19; are under quarantine or isolation order by the government or a doctor (or are caring for someone who is); or have to care for a child whose school or child care provider closed, due to COVID-19.”
If a company with less than 500 employees already provides paid family leave will they get the credit? How will they prevent fraud and abuse by small employers and self-employed individuals?
It is hard for be to believe that the President has this power. It just doesn’t seem right. It seems out of control.
The battle among the crony capitalists!
I read the report in The Des Moines Register about the questioning of Tom Vilsack by Joni Ernst during the Senate hearings on Vilsack’s nomination for Secretary of Agriculture. (Vilsack nomination moves to full Senate” 2/3/2021) President Biden has ordered the development of a plan to convert all federal, state, local and tribal vehicles, including Post Office vehicles, to “clean and zero-emission vehicles.” Ernst asked Vilsack if he will direct the USDA to buy Tesla trucks that run on electricity or Ford vehicles that run on 85% ethanol. Vilsack, like a good politician, said it’s not ” an either-or circumstance.” It will be interesting to see how Vilsack balances the interests of farmers and biofuels producers with the interests of the zero-emissions vehicle and power producers. One thing is for sure: lobbyists will be in high demand.
Governor Reynolds supports crony capitalists.
Governor Reynolds has proposed legislation to make, “…biofuels the clear choice for Iowa drivers…”, by mandating a minimum of 10% ethanol in all gasoline and 11% biodiesel in all diesel fuel sold in Iowa. (See link to Register report below.) If her proposal becomes law, it would make biofuels the clear choice – because then there would be no other choice.
This is a shining example of how government works when a law or regulation has concentrated benefits and dispersed costs. Those who receive the concentrated benefits, (in this case farmers and biofuel producers), will lobby heavily to get their benefits, while the cost to any individual is so small that it doesn’t justify the time or money to lobby against the legislation. Then, those who receive the benefits become dependent on them and continue to lobby to ensure that the benefits never come to an end. Don’t call it free-market capitalism. It’s called crony capitalism.
Link to Register report – printed 1/27/21: https://www.desmoinesregister.com/story/money/agriculture/2021/01/26/kim-reynolds-plans-require-10-ethanol-11-biodiesel-iowa-fuel/4259109001/
Open letter to our federal legislators – please try to balance costs and benefits during this pandemic!
- Seniors and others on Medicare, disability, pensions, and other fixed incomes – they will continue to be paid.
- People who have had no reported W-2 earnings during the past year – since they have been getting by on unearned income
- People who have household earnings around or over $75,000 per year – they qualify for unemployment benefits.
Don’t give grants, but make low-interest rate loans available. We can decide later whether or not to forgive any loans. Don’t allow unrelated “riders” on any pandemic response bill. For example, don’t’ forgive student loans, don’t add any permanent employer mandates such as child care, sick pay, paid family leave, etc. Watch out for and deny other special-interest legislation trying to take advantage of this crisis.
Please try to balance costs versus benefits. We have lived normally with the flu killing tens of thousands of U.S. citizens every year. I am a senior – age 66 – and I don’t need any bailout.
No end to subsidies for favored industries?
The $1 per gallon tax credit for biodiesel producers just passed the U.S. House and appears likely to become law. The credit, which expired at the end of 2017, will be extended retroactively 2 years and forward for 3 years through 2022. This tax credit started in 2005. How long must the welfare continue? Biodiesel producers are no different than most other businesses and industries in that they become dependent on subsidies and lobby heavily to prevent the subsidy from ever ending. We need to pass laws that phase out all forms of energy subsidies, as well as subsidies given to other favored industries. We need free-market capitalism, not crony capitalism.
Link to related Register report: https://www.desmoinesregister.com/story/news/2019/12/17/spending-bill-includes-long-sought-biodiesel-tax-credit-renewal/2677476001/
Our federal legislators should oppose reauthorization of the Export-Import Bank
I urge our elected federal representatives to oppose the reauthorization of the Export-Import Bank. (The Ex-Im Bank provides taxpayer guarantees to U.S. companies that export and sell products to international customers. Authorization is set to expire on 9/30.) This has been and continues to be a quintessential example of crony capitalism. If a U.S. exporter has customers who find it difficult to find financing, the seller can always guarantee a loan and get a security position to get the asset back in a worst case. If they still cannot get financing, the seller could provide direct financing. In any case, our government should not guarantee such loan private companies.
I’m sure that small and large Iowa export companies are heavily lobbying for reauthorize the Bank. I hope our representatives resist the pressure and vote against this bad policy where taxpayers are asked to take the risk and private companies reap the profits.
We don’t need a new mandatory federal government entitlement program.