Ruth Young: Redistribution of wealth
October 9, 2012
In passing the beautiful scenery in the Yampa Valley and the Elk River Valley, one cannot help but notice the beautiful ranches with big Romney/Ryan signs on their property. I've seen no Obama/Biden signs on any ranches.
The Romney/Ryan team is against "redistribution of wealth." In economic terms, this is called a "transfer payment," or if it is a payment to an industry, it is called a "subsidy." The Romney/Ryan team would cut transfer payments such as Medicare, food stamps and other programs for the poor.
Yet many ranches also receive transfer payments. Are the ranchers against all transfer payments or just transfer payments to others? Many ranchers and farmers receive direct subsidies from the U.S. Department of Agriculture. They receive price support for their crops. They pay reduced fuel taxes on their tractor fuel. Almost all ranchers receive transfer payments in the form of substantially reduced property taxes. Owners of ranchland with a market value of $10 million may pay about $1,000 to $1,500 in property taxes. Compare that to the taxes you pay on your $400,000 home. That is a transfer payment — redistribution of wealth from you to them.
Many ranchers will say ranching is hard work, and they couldn't make a living if they had to pay property taxes on the full market value of their land and without those checks from the Department of Agriculture. That situation is not unlike the cotton farmers of the 1850s who could not raise cotton without slaves. It was uneconomical. Economists would say that if you can't make a living (profit) with a certain set of resources, in this case land, the resources should be put to uses that are valued more highly.
Don't get me wrong. I love Steamboat, the Yampa Valley and the Elk River Valley. I would hate to see the ranches disappear and turned into something else. But people who live in glass bunkhouses shouldn't throw stones. The waitress (who does not own land, cattle, horses or even a house) may need transfer payments in the form of food stamps to help feed her kids, just as some ranchers might need transfer payments to keep on ranching.
Finally, these opinions are based on anecdotal evidence. They are just generalizations. I know that not all ranchers receive checks from the Department of Agriculture, and even if there is a rancher who receives no transfer payments in the form of reduced property taxes, I would hope that even that person doesn't want to see fellow Americans die from lack of food or proper medical care.
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