Wednesday, May 14, 2008

A dishonest definition of wealthy

In a post titled Democrats: the party of . . . rich farmers? Megan quotes Richard Posner who says

The President has expressed dissatisfaction with the proposed Farm Bill wending its way through Congress. He wants farmers whose annual incomes exceed $200,000 to be denied subsidies; the present cutoff is $2.6 million and Congress will not go below $950,000. The President's concern with farm subsidies cannot be taken very seriously, since in 2002 the Republican Congress with Administration connivance greatly increased these subsidies and at the same time repealed some of the modest reforms that the Clinton Administration had introduced in 1996. The Administration's current proposals would, if enacted, be a step in the right direction, but they will not be enacted, and, judging from the 2002 legislation, they are intended I suspect merely to embarrass the Democratic Congress.
Megan, in full Instafuckingasshole mode, adds
What I don't get is why the Democratic Congress is letting itself be embarrassed this way. Of all possible reforms, this would seem to be a no-brainer. How many fabulously wealthy Democratic farmers in swing states can there be?
Here is the NYT article on the topic, which suggests, without being clear, that we're talking about gross income, an important distinction.
A big sticking point is how much money would go to wealthy farmers. Married farmers with joint incomes of up to $1.5 million a year and individuals who make more than $750,000 could qualify for some crop subsidies. The Bush administration has called for much lower limits that would deny subsidies to anyone with an average adjusted gross income above $200,000 a year.
To begin, while I know literally nothing about farming, I have no difficulty believing a farm could have $200k gross income a year and be very much in the red. I have no real difficulty believing a farmer could net as little as $50k from the $750-950 range under discussion, if indeed it's gross. The fact that Posner does not note whether he's talking about net or gross strikes me as a potentially dishonest move, insofar as if it's the latter we are not talking about fabulously wealthy farmers. The fact that Posner, and Megan, are echoing the Bush Admin line is certainly not a point in their favor.
Megan, of course, doesn't trouble herself with such trivial things as net versus gross. There's probably not much of a distinction there for her, though the way she bitches about doing her taxes suggests she tries to write off everything she can.
Starbucks is not an operating expense, Megan.


Anon in comments is correct, I mistook adjusted gross income for gross income. The former is, apparently, much closer to what most of us think net means than to the latter term. In my mild defense I must note that I wasn't the only one to make this mistake, leading Megan to produce a second post on the topic containing actual information, which must have been painful for her.


spencer said...

Megan engaging in dishonest debate about wealth and / or class issues? The hell you say!!

M. Bouffant said...

I know less than nothing about farming, but if I'm not mistaken, most family/individual farms (as opposed to agri-biz industrial farms) are pretty much beholden to banks. Apparently if there's a drought, a crop blight or whatever, Mr. Farmer may not have much income in any given yr., & may have to go the bank to tide him over.

I still have no idea about the farm subsidies, but it's very unlikely many farmers are profiting anywhere near six figures.

Anonymous said...

You don't have to know anything about farming to know what adjusted gross income is. The average "Net Farm Income" (which is a component of AGI, not net farm sales, or whatever super clever point you thought you were making) was $25K, last year. The only type of farm that on average produced more than $200K in Net Farm Income was Very Large family farms--even non-family farms produced, on average, less than $200K.

This really is about giving Sam Donaldson and Scotty Pippen free money--people who make lots of money in other ways, but happen to like owning farms. And about giving free money to ADM, an evil, mega-agricultural company that needs free money as much as Unocal and Chevron do.

Anonymous said...

Gross Income ≠ Adjusted Gross Income.

brad said...

Anon, I prefaced my comments with an admission of ignorance. You clearly have specific knowledge I don't, despite your snark. I don't know what is and isn't deductible, I simply know farms generally, as M. noted, bank on the coming crop to make debts and income balance.
I made a mistake in not noting it was adjusted gross income. All I can say is even when I disagree with the conclusions someone like Surowiecki comes to, I understand why they did and the basic context of the issue. Had Megan and Posner provided good arguments I would not have to try to wander through an unfamiliar field on my own. And their arguments were my target, not the merits of the farm bill.