Where is the Windfall Profits Tax on Farmers?
This week, we have been given a chance to see a real contrast. Two consumer staples, gasoline and food, have both seen their prices go up substantially over the last several months. Both price spikes have been due to a combination of market forces (particularly increasing wealth in Asia) and US government policy that has the effect of restricting supply.
However, the political response from Congress has been completely different. In the very same week that Democrats in Congress have introduced bills to punish oil companies for high prices with windfall profits taxes, they have passed a farm bill that rewards farmers who are already getting record high prices with increased price supports and direct subsidies. This despite the fact that on a percentage basis, the increase in crop prices has been far larger than the recent increase in gas prices. The contrast in approaches to two industries in very similar situations couldn't be more stark.
The only reason I can come up with is votes: There are a lot more farmers and people who feel themselves dependent on the agricultural industry than there are oil workers. The oil industry is incredibly efficient on a revenue per employee basis, and I guess that comes back to haunt them. There is no oil industry equivalent of the Iowa Caucuses to cause politicians to fall to the ground groveling and shoveling out taxpayer money to buy votes.
