I Hope You Like Your Wine with Taxes on the Side

Tad DeHaven over at the Cato Institute made a list of this year’s beneficiaries of the U.S. Department of Agriculture’s Value-Added Marketing Grant program. The program, which is relatively small compared to others, will spend some $56 million in taxpayer dollars on “producers of agricultural commodities” who can use the money “for planning activities and for working capital for marketing value-added agricultural products.” As DeHaven explains this year the winners are wine producers:

The rationale behind this grant is that the producers will generate economic growth and jobs. That’s the excuse behind most of these grants without much evidence to support the claim. And while the grant may help a company stay in business — for now — or help produce a bottle of wine at a price that consumers can stomach, these subsidies are paid for by taxpayers through their taxes or with more debt which ultimately will have to be paid for by taxpayers. The government doesn’t have money of its own, and in order to subsidize wineries it needs to get the money somewhere else in the economy. (Obviously this is true for all subsidies whether for oil, gas, wind, sugar, small businesses, etc.).

As DeHaven concludes:

The $56 million Value-Added Marketing Grant program is a pretty small outlay in a $3.8 trillion federal budget. However, it’s not so much the size of the program that’s the problem. Rather, the program symbolizes the problem with allowing the federal government to spend other people’s money on virtually anything that the politicians on Capitol Hill desire. Given the government’s rising debt load, that situation must be remedied before Washington sends the economy off the cliff.

Sigh . . . somebody pass me a bottle of wine.

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. Her primary research interests include the U.S. economy, the federal budget, homeland security, taxation, ...

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