Subsidies

Will the Mustache Subsidy Be the Next Solyndra?

Like all good satire, a group seeking a $250 deduction for mustachioed men makes a serious comment.

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The line separating real life from parody is so exceedingly thin that it can be hard to tell which is which—especially in Washington. So let's stipulate right at the outset that the American Mustache Institute's pursuit of a $250 federal tax deduction for men with mustaches is a joke. Yet like all good satire, its humor contains serious comment.

On April 1—April Fool's Day—the Institute will hold a Million Mustache March in D.C. to champion its cause: the Stimulus To Allow for Critical Hair Expenses Act, or STACHE Act for short. In the meantime, it is following the template inscribed by other interest groups seeking special treatment from Washington. It has a Facebook page, celebrity endorsements, a media campaign, and even a congressional backer. Maryland Rep. Roscoe Bartlett has referred the measure to the House Ways and Means Committee for study.

Like any lobbying group worth its salt, the Institute also has produced a white paper. It explains why special tax treatment of "the activities of the Mustached American people, or people of Mustached American descent or heritage as they are commonly known," is good not only for men with lip caterpillars, but for the greater welfare of America as a whole.

"Recent studies demonstrate that a Mustached American lifestyle can have a positive impact on the American economy," writes the author, Dr. John Yeutter. Tea strainers and cookie dusters are also environmentally friendly: They save water and shaving products.

What's more, the nation has been immeasurably improved by the activity of Mustachioed Americans, from Walt Disney to Martin Luther King, Jr. (to say nothing of icons such as Burt Reynolds and Billy Dee Williams). Mustached American households have slightly higher income, says the Institute, and ought to be encouraged with a tax deduction for necessities such as trimmers, coloring agents, bacon, and "Magnum, P.I." DVD collections.

Funny stuff. And it's funny not just because mustaches are inherently amusing. It's also funny because it mimics so well the way special interests pretend they are acting on behalf of the common good – and the way others buy it.

Proponents of clean energy, to cite one of example of many, produce papers purporting to show that federal loan guarantees, tax subsidies, and so on are employment bonanzas. President Obama's energy policies "have provided thousands of much-needed jobs in Michigan and other recession-battered states," writes The New York Times about the program that gave us the Solyndra scandal.

Ditto the stimulus, whose estimates of job creation are based not on actual head counts, but on guestimates and formulas. Yet when The Wall Street Journal went in search of actual workers who had been employed because of section 1603 of the American Recovery and Reinvestment Act – a program that handed out billions for alternative-energy projects, which ostensibly created more than 100,000 new jobs – it could find only a few hundred.

The Mustache Institute, like nearly every other industry in America, is engaged in what is known as rent-seeking: the pursuit of economic advantage through political means. Rent-seeking is incessant in Washington because it works—and works well. Politicians love to lavish special treatment on favored groups, from farm subsidies to tax credits for renewable energy investments. The federal tax code ran to a little more than 26,000 pages in 1984. It now exceeds 72,500, thanks largely to the myriad special favors Congress has written into it.

And once a special favor is conferred, it becomes almost absurdly difficult to get rid of. Take the mohair subsidy, created after WWII out of concern that domestic producers might not be able to supply enough wool to clothe the armed forces in future wars. The military phased out wool uniforms not long afterward. But the loans and price supports continued until the mid-1990s. They finally were killed off – only to rise again from the dead a few years later.

This sort of thing happens because of what Jonathan Rauch calls demosclerosis. The beneficiaries of each federal program have a powerful financial stake to organize and lobby for its continuation. The average citizen, on the other hand, has very little reason to oppose any particular program by itself – even though he might resent such favoritism in the aggregate. So the programs proliferate until eventually, as Hungarian philosopher Anthony de Jasay argues, the economy becomes so muddied that nobody has any idea whether he is better or worse off, on balance, from the redistributionary churn.

It's fitting that the Million Mustache March will take place on April Fool's Day. At least the American people will know they're being pranked—for once.

A. Barton Hinkle is a columnist at the Richmond Times-Dispatch, where this article originally appeared.