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Tag: subsidies
Getting The Sports Moguls Off Our Backs

Getting The Sports Moguls Off Our Backs

It was not out of a sense of decency that the National Football League recently let go of its tax-exempt status. You see, as a tax-exempt organization, the NFL had to disclose Commissioner Roger Goodell’s compensation — $44.2 million in 2012. That seemed an excessive sum for the head of a “nonprofit” freed from having to pay any federal income tax. Now the NFL can keep it secret.

Tax exemption is a subsidy. The taxes the NFL money machine didn’t have to pay, everyone else had to pay. Thanks go to former Sen. Tom Coburn (R-OK), Rep. Jason Chaffetz (R-UT), and Rep. Elijah Cummings (D-MD), for railing against such unsightly deals.

But that’s not the only good news for citizens tired of being milked by billionaire sports moguls. Consider Verizon’s decision to let customers buy TV packages that do not include ESPN or other sports channels.

An explanation: Animal Planet and Food Network are not why TV bills are so ludicrously high. What drive them up are the enormous fees the sports channels extract for their programming.

ESPN alone tacks an estimated $7 on monthly bills. By comparison, USA Network adds less than $1.

An interesting calculation: If every month you put $7 into an investment with an annual return of 4 percent, you’d have $1,027 after 10 years. These things add up.

It was not charity that prompted Verizon to let its customers buy a smaller base package of channels, plus extra bundles containing the channels they actually watch, at lower cost. Every month, thousands of Americans — incensed by their monthly TV bills and now able to get most of what they watch from the Internet — have been “cutting the cord,” that is, dropping their cable, satellite, or fiber-optic TV service altogether.

Anyhow, ESPN has dragged Verizon Communications into court. The sports network, the Disney empire’s most lucrative business, claims that Verizon broke a contract requiring that ESPN channels be part of its basic offerings. Verizon says that any of its customers can obtain ESPN through a bonus bundle at no additional cost and that therefore it is included.

Never did I think I’d say this, but I am rooting for my pay-TV provider.

On to another reason to cheer. President Obama’s proposed budget would ban the financing of professional sports stadiums with tax-exempt bonds. Such bonds lower borrowing costs for the zillionaire team owners. Currently, 22 NFL teams play in stadiums financed by tax-exempt bonds, as do 64 professional baseball, basketball and hockey teams.

Why would tax-exempt bonds — created to help cities, towns, and states pay for needed infrastructure — go to benefit mega-businesses? Because the team owners have succeeded in conning locals to see sports arenas as economic magnets pumping money into their weary tax bases.

Lots of studies contradict this self-serving propaganda. First off, the economic activity generated by the teams often pales next to the concessions wrenched from the taxpayers. Secondly, many of the dollars spent at the games are dollars that would have otherwise been left at local businesses, such as restaurants.

Furthermore, the subsidy-bloated profits generally end up in the pockets of the owners and their magnificently paid players — who promptly take them out of town. With all due respect to Cleveland, one doubts that LeBron James spends many of his millions there.

Ending tax-exempt bonds for sports arenas might reduce our elected officials’ temptation to sacrifice their taxpayers in return for good tickets to the game. That would be the best outcome.

They who love professional sports should pay for them.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com. 

Photo: Parker Anderson via Flickr

Farm Subsidies Reveal Congressional Double Standard

Farm Subsidies Reveal Congressional Double Standard

Congress has left me confused. Stunned, actually, as well as bewildered, chagrined and slightly depressed. The GOP-dominated House has passed a bill that defies compassion, mathematics and common sense.

OK, so there’s nothing unusual about that. Point taken.

But the recent passage of a farm bill, after months of delay, is an especially sharp example of congressional priorities — protect the rich and punish the poor, comfort the comfortable while brutalizing the afflicted. The bill will cut the Supplemental Nutrition Assistance Program (SNAP), usually known as food stamps, while preserving subsidies for farmers, most of whom could get by quite nicely without help.

By contrast, many Americans are struggling with a globalized, roboticized economy that has devalued the average worker. The new economy has forced down wages, eliminated job security and abandoned traditional perks such as pensions. It is quite possible to work 40 or 50 hours a week and still need help to put food on the table, as the managers of food pantries around the country will attest.

Yet, congressional observers are predicting that the farm bill will pass the Senate and get President Obama’s signature. While most Democrats don’t like the cuts, the current bill, they figure, is the best they can do. It takes about 1 percent from SNAP — around $800 million a year in the $80 billion-a-year program — but that’s less than conservatives had initially sought.

Still, if Republicans really care about deficits, if they really want to rein in government, if they believe people ought to stand on their own two feet and refuse the “welfare state,” why are they preserving welfare for those who need it least? Do they not see the glaring hypocrisy in their insistence on farm subsidies?

The bill does end the least politically defensible part of farm welfare: direct payments, paid to farmers whether they plant or not. But it continues a host of other unnecessary programs that cost billions — including crop subsidies and crop insurance. Indeed, the bill increases some crop subsidies, such as those to Southern peanut farmers. And the remaining programs are just as bad as the direct payments.

Take crop insurance, which has its roots in the Dust Bowl era. Though conditions have changed substantially since then — the small family farmer has virtually disappeared — crop insurance has mushroomed. In 2012, according to The Insurance Journal, taxpayers spent $14 billion insuring farmers against a loss of income. Is there any other business in America that gets that sort of benefit? Aren’t farmers supposed to be entrepreneurs willing to take risks?

This farm welfare comes at a time when agricultural income is soaring. Last year, farm income was expected to top $120 billion, its highest mark, adjusted for inflation, since 1973, the Insurance Journal said. Lots of millionaires and billionaires are on the list of those receiving the assistance.

One case of mind-boggling hypocrisy is that of U.S. Rep. Stephen Fincher, a Republican and a farmer from Frog Jump, TN, who collected nearly $3.5 million in subsidies from 1999 to 2012, according to the Environmental Working Group. In 2012, he received $70,000 in direct payments alone — again, money paid to farmers whether they plant or not. (Can anyone say “moochers” and “takers”?)

Fincher, however, supports draconian cuts to food stamps. During a congressional debate over the SNAP program, he said, without apparent irony: “We have to remember there is not a big printing press in Washington that continually prints money over and over. This is other people’s money that Washington is appropriating and spending.”

I don’t know why the cognitive dissonance doesn’t make his brain explode.

Fraud, by the way, is rampant in farm subsidies, although you’re unlikely to hear anything about it. While the occasional welfare cheat or food stamp grifter is held up as an example of widespread abuse, neither politicians nor reporters talk much about the fraud involved in agricultural programs. You have to burrow into reports from the Government Accountability Office for that. They point to millions stolen by farm cheats.

It’s enough to make you wonder what the food stamp critics are really upset about. Government spending? Or giving the working poor a little more to eat?

(Cynthia Tucker, winner of the 2007 Pulitzer Prize for commentary, is a visiting professor at the University of Georgia. She can be reached at cynthia@cynthiatucker.com.)

AFP Photo/Scott Olson

FAA Partial Shutdown A Sign Of Things To Come

The Federal Aviation Administration (FAA) was recently forced to partially close and send employees home without pay because House Republicans, concerned about spending and the federal budget, didn’t want to extend $16.5 million in subsidies to the agency. The shutdown is costing government $30 million a day in much needed revenue from airline taxes; in other words, shutting down government costs significantly more than trying to make it work. It might be a preview of what will happen if the House GOP gets its way (underfunded, poorly functioning government) or if it doesn’t (government shutdown and chaos). As Congress fights over how to raise the debt ceiling, it might be worthwhile to wonder which programs will get cut and which will not.

The drastic steps — which affect 4,000 “non-essential” employees (basically, everyone except the air-traffic controllers) — came on Friday after House Republicans refused to extend the authority of the $16 billion agency unless House Democrats agreed to remove a small subsidy intended for rural aviation that helps hundreds of small towns, farms, and other rural areas.

This means that, while flights can get off the ground, billions of dollars in airport construction projects has come to a halt, also costing workers their jobs.

At first, some believed that the freeze on tax collections would translate into lower ticket prices. Instead, airlines — which have struggled recently — have kept prices steady , effectively collecting 7.5% more in profits for themselves.

Considering the impact of the closure of a single federal agency is so widespread, imagine what would happen in the event of a U.S. default. If multiple agencies partially shutdown, it could cut a giant hole in the national debt the size of a massive government program. The Republican recalcitrance over the debt ceiling threatens thousands of American jobs by jeopardizing government agencies and slowing projects throughout the country. The FAA’s current state is a dismal warning of what might come next.