The Convenient Conservative

It has become nearly impossible to determine what is driving Idaho Congressman Walt Minnick these days.  Is Minnick really being driven by what's "Right for Idaho" as he claims?  Or is it just whatever's right for Walt Minnick?

The bluest of the Blue Dogs, Minnick bills himself as a "true fiscal conservative," vowing to vote at every opportunity to strip earmarks from spending bills and "demanding that Congress balance the budget."  Last week Minnick voted for a measure that, according to the Center on Budget and Policy Priorities, will cost $609 billion over ten years.  In a press release, he touted the vote as a guarantee for Idaho family farmers who would otherwise be burdened with onerous tax increases.

The measure, which passed the House on a 225 to 200 vote, permanently extends the current estate tax exemption of $7 million per couple and keeps the tax rate at 45 percent.  Without this legislation the exemption would have dropped to $2 million per couple in 2011.  Minnick also supported Republican procedural attempts to eliminate the tax for two years and has supported excluding farm land from the tax completely.

Being a businessman for 30 years, as he is fond of saying, Minnick is acutely aware that a decrease in revenue has the same effect on a balance sheet as an increase in costs—not what you'd want to see in a budget, especially one you were demanding be balanced.  Evidently a vote against spending roughly $900 billion on health care reform is sexier than telling those inheriting multimillion dollar estates to pay a little more for the services they receive.  That, or it just sounds better to teabagging voters.  Or maybe Walt Minnick is just a convenient "true fiscal conservative."

Whatever the case, it is unclear who Minnick thinks he is protecting from "onerous" taxes.  In his press release he conceded to estimates that only 100 people in the entire United States would be affected by estate taxes under this recent legislation.  But how many Idaho family farms would actually be "saved" from this onerous tax if the legislation is enacted?

Lucky for us, the U.S. Department of Agriculture takes an annual survey of just such things.  The balance sheet for the average operator household, or family farm, from the most recent Agricultural Resource Management Survey, is shown below.  [The assets and liabilities are broken out further in this chart and access to all the data and tables can be found here.]

According to the survey, the average family farm in the West is currently worth just over $1 million—far below the $7 million exemption that Minnick felt it vital to preserve and even well below the $2 million exemption that would have been "onerous" to family farms.  The average Idaho farm family would have been exempt from estate taxes in either case.

It is crystal clear that it is not the average family farm Minnick is protecting.  In fact, it doesn't take a survey to see that there is nothing average about a $7 million estate and that Walt Minnick is just fiscally conservative when it's convenient for him to be so.

Protecting multimillion dollar estates is more important to Walt Minnick than providing health insurance to average Idahoans.  That may be right for Walt Minnick but it's not right for Idaho.

Comments

[Pinecricker]

Regarding the comment "...Minnick is acutely aware that a decrease in revenue has the same effect on a balance sheet as an increase in costs." First, a balance sheet reports assets and liabilities. Revenue and costs would be reported in a Profit and Loss statement. Second, a change in costs is by no means the same as a change in revenue.

If you have revenues of 100 and costs of 80, add 5 to your cost and your margin is 15.0%, conversely subtract 5 from your revenues and your margin is 15.8%. If your comments are truly representative Walt's business acumen, I think we might be in trouble :-0

[MountainGoat]

Ah... Pinecricker, yes you are technically correct and thank you for the free intro to Business 101. Maybe if the term "budget" been substituted for "balance sheet" it wouldn't have thrown your decoder ring off kilter. Obviously the federal government isn't a business, doesn't exist to make a profit and isn't going to be calculating profit margins any time this century... at least, I'm guessing. The point was a simple concept: that the net result of a decrease in revenue is the same as an increase in costs--in your example $15 profit. Or, say a family with an income of $3,000 and expenses of $2,500 per month were to lose $500 a month in income, the net effect on the family budget would be the same as a $500 increase in expenses--no money left over at the end of the month. I believe Walt might even stipulate to that but I suppose his business acumen will have to speak for itself.

[Vanderbilt]

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