Restricting Sugar Imports, Hidden Tax Increases, and Just Plain Waste | Citizens Against Government Waste

Restricting Sugar Imports, Hidden Tax Increases, and Just Plain Waste

The WasteWatcher

Sugar Program Proves Costly to Taxpayers

            The antiquated U.S. sugar program continues to cause trouble for American companies, consumers and taxpayers.  While supporters of the program have always tried to claim that it doesn’t cost taxpayers any money, according to the Government Accountability Office (GAO), the highly restrictive import quota already costs U.S. consumers as much as $1.9 billion annually, which is nothing more than a sugar consumer tax.

            Even worse, the 2008 Farm Bill added a new sugar subsidy, the Feedstock Eligibility Program, which requires the federal government to buy up surplus sugar and sell it at a loss to ethanol plants.  The Congressional Budget Office estimates this program will cost $992 million over the next 10 years.

            It would make more sense if the restrictive sugar import quota were lifted.  Then, if ethanol companies wanted to use sugar to produce ethanol, they could purchase cheaper sugar from outside the U.S. rather than be subsidized by the taxpayers to purchase higher priced U.S. sugar.  However, despite the fact that U.S. Department of Agriculture (USDA) experts forecast unprecedented sugar shortages for the immediate future, USDA Secretary Thomas J. Vilsack refuses to use his authority to increase the sugar import quota.

            Without a quota increase, consumers will pay higher prices and food manufacturing jobs in the U.S. will continue to be at risk, and taxpayers will be stuck with a sour deal on the sugar program.

Hidden Tax Increases in the States

            A growing number of state governors and legislatures are trying to avoid openly increasing taxes by instead making some of their excise taxes ad valorem, which increase automatically as the value of the merchandise increases.  Property taxes, for example, rise along with increased assessed values.  Now, many states like to tax products such as smokeless tobacco on an ad valorem basis.  Most excise taxes are assessed on a per unit basis, which means that the governor and legislature are required to enact a tax increase if that is what they want.  But, an ad valorem tax basis means that the tax increases as the value of the product increases.  The politicians would never have to vote on it or be held accountable.  Such hidden tax increases are unfair to taxpayers in those states.

Is Double the Waste Double the Fun?

            Representative Louise Slaughter (D-N.Y.) has asked the Government Accountability Office (GAO) to review federal efforts to collect antibiotic use in animals.  At first blush, this doesn’t sound like an unreasonable request.  However, Congress passed a law one year ago as part of the Animal Drug User Fee Act (ADUFA) that would require the Food and Drug Administration to collect data on all antibiotic use in animals, so this data is already being collected by the federal government.  So, Rep. Slaughter’s request would waste precious resources at a time when the federal deficit is the highest in the nation’s history. 

            Astoundingly, it was Rep. Slaughter’s provision that became the basis for the new data collection requirement in ADUFA.  It is somewhat bizarre that she would successfully propose a legislative requirement to collect data and then ask for a GAO study on what efforts are being made to collect the same information.  Whether Rep. Slaughter has memory problems or not, the bottom line is that taxpayers shouldn’t have to pay twice for this data collection.

    - John E. Frydenlund

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