A leading Senate conservative is taking aim at tax breaks that he says amount to welfare for millionaires, a line of critique that usually comes from liberal Democrats.
Sen. Tom CoburnThomas (Tom) Allen CoburnBiden and AOC's reckless spending plans are a threat to the planet NSF funding choice: Move forward or fall behind DHS establishes domestic terror unit within its intelligence office MORE (R-Okla.) released a report detailing special tax breaks for wealthy income earners that could give members of the supercommittee common ground for raising tax revenues.
The report found millionaires enjoy about $30 billion worth of “tax giveaways” and federal grants every year — almost twice NASA’s budget, the report notes.
“From tax write-offs for gambling losses, vacation homes and luxury yachts to subsidies for their ranches and estates, the government is subsidizing the lifestyles of the rich and famous. Multimillionaires are even receiving government checks for not working,” Coburn said in a statement Monday.
The report is significant because Coburn is one of the Senate’s outspoken conservatives and has spent more than a year working intensely on a bipartisan grand bargain to reduce the deficit.
Meanwhile, Republican and Democratic members of the deficit-reduction supercommittee have deadlocked over finding sources for new tax revenue. Republicans last week proposed raising $300 billion in net new tax revenue, but Democrats rejected the offer because it would permanently establish lower marginal income tax rates.
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Coburn has identified billions of dollars in tax breaks reaped by millionaires that Democrats could be quick to target, as Republicans might suffer political damage by defending these special breaks. Sen. Charles SchumerChuck SchumerMcConnell signals Senate GOP will oppose combined debt ceiling-funding bill Centrist state lawmaker enters Ohio GOP Senate primary Biden discusses agenda with Schumer, Pelosi ahead of pivotal week MORE (D-N.Y.) has centered the 2012 Democratic campaign message on the theme that Republicans favor the interests of millionaires and billionaires over the interests of the middle class.
It also could set off another clash between Coburn and Grover Norquist, president of Americans for Tax Reform, who argues that Congress should not raise taxes unless they are offset by other tax cuts.
The two-term senator has more investigative power than many of his colleagues because he is the senior Republican on the Senate’s Permanent Subcommittee on Investigations.
His staff found that millionaires received $74 million worth of unemployment checks from 2005 to 2009; $316 million in farm subsidies from 2003 to 2009; $89 million for the preservation of lands on ranches and estates in 2009 and 2010; and $7.5 million to compensate for property damages caused by disaster.
And it found that nearly 1,500 millionaires did not pay federal income tax in 2009.
In 2009, 18 people earning more than $10 million a year received an average of $12,000 in unemployment benefits. That same year, 74 people earning between $5 million and $10 million received $18,000 in benefits, on average, according to the report. In 2008, 2,840 millionaires received unemployment benefits — an average of $6,500 per beneficiary.
“This welfare for the well-off — costing billions of dollars a year — is being paid for with the taxes of the less fortunate, many who are working two jobs just to make ends meet, and IOUs to be paid off by future generations. We should never demonize those who are successful. Nor should we pamper them with unnecessary welfare to create an appearance everyone is benefiting from federal programs,” Coburn said.
Coburn’s report found that from 2006 to 2009, millionaires claimed $27.7 billion in mortgage interest tax deductions, $64.3 billion in rental expense deductions and $21 billion in deductions for gambling losses. During that time, millionaires also deducted $607.7 million for business entertainment expenses, according to Coburn.
The average annual amount of tax breaks claimed by millionaires is $28.5 billion, Corburn’s report found.