Warm Southern Breeze

"… there is no such thing as nothing."

Tom Coburn: End welfare for the wealthy

Posted by Warm Southern Breeze on Thursday, December 1, 2011

Congress, it has been recently noted, has the lowest approval rating since record-keeping of that type has begun. In fact, it was noted with significantly ironic disdain, that more Americans favor the United States becoming a Communist nation than approve of Congress. Disapproval of congressional action – or inaction – has been duly noted by all members of congress, house and senate.

Regular readers of this blog will recognize that I have excoriated Republicans and their presidential nominee wannabes for numerous reasons, not the least of which is their blind obedience to their corporate masters – which in essence, makes them high-powered prostitutes – whores, if you prefer – and for the greatest part towed the line refusal to modify or raise – even slightly – of the rich, which has been the proposal of “some random person,” otherwise known as Grover Norquist. The reader may be interested to know that Mr. Norquist was “promoter of the “Taxpayer Protection Pledge” which was signed by 95% of all Republican Congressmen and all but one of the 2012 Republican presidential candidates – in which the signer promises to never, under any circumstances, support an increase in taxes.” That pdf document may be downloaded here.

Human nature what it is, many will be loyal to those whom sign their paychecks, particularly when powerful strings are attached to those checks.

And yet, while we respect loyalty, we also honor those whom stand upon principle, and whom are motivated and guided by selflessness and a genuine desire to help others – with liberty and justice for all – not just an elite cadre.

In that sense – especially in this Op-Ed – Senator Tom Coburn, R-OK, seems to be the voice of reason in the GOP. The reader may also be interested to note that Sen. Coburn was a signatory to that random lobbyist promulgated document. The lobbyist being none other than the Born-with-a-silver spoon-in-his-mouth-Harvard-educated Grover, whom federally-convicted felon-lobbyist Jack Abramoff also fingered in his recent tell-all. It is interesting to note that Sen. Coburn has chosen the high road.

End welfare for the wealthy

By Tom Coburn, Special to CNN
updated 2:10 PM EST, Thu December 1, 2011

(CNN) — The debate in Congress this week about whether to pay for extending the payroll tax cut by imposing a new tax on millionaires will have nothing to do with solving our nation’s economic challenges and everything to do with election-year politics. Senate Democratic leaders have already signaled they will use the debate as a purely partisan exercise designed to embarrass Republicans into opposing tax cuts for the poor while defending tax cuts for the rich.

I intend to offer an alternative. Instead of punishing the rich with higher taxes, I will give Congress the option of helping pay for extending the payroll tax cut by ending welfare to the wealthy.

Read Sen. Coburn’s report, “Subsidies of the Rich and Famous”

Every year, politicians on both sides engage in a process of reverse Robin Hood in which they steal $30 billion from low- and middle-income Americans and provide handouts to the rich and famous.

Sen. Tom Coburn, MD (R-OK)

Sen. Tom Coburn, MD (R-OK)

Millionaires receive tax earmarks and deductions crafted by both parties that allow them to write off billions each year. These write-offs include mortgage interest deductions on second homes and luxury yachts, gambling losses, business expenses, electric vehicle credits and even child care tax credits.

Sen. Tom Coburn says it's hard to defend mortgage interest deductions on luxury yachts, such as these lined up in Miami.

Sen. Tom Coburn says it's hard to defend mortgage interest deductions on luxury yachts, such as these lined up in Miami.

Meanwhile, direct handouts for millionaires have included $74 million in unemployment checks, $316 million in farm subsidies, $89 million for preservation of ranches and estates, $9 billion in retirement checks and $7.5 million to compensate for damages caused by emergencies to property that should have been insured. Millionaires have even borrowed $16 million in government-backed education loans to attend college since 2007.

The goal of highlighting these excesses is not to demonize those who are successful. Instead, by highlighting the sheer stupidity of pampering the wealthy with lavish benefits through our safety net and tax code, I hope to make a moral and economic argument for real entitlement and tax reform.

The most troubling gap in America today is not an income gap. It is an integrity gap — and even intelligence gap — between Washington and the rest of the country.

Families are struggling to make ends meet and are making painful economic choices as politicians in Washington borrow billions to provide welfare to the wealthy. Politicians on both sides refuse to fix big problems and defend stupid policies because changing those policies would involve upending a comfortable political status quo.

It’s important for taxpayers to understand that these distortions are not accidental loopholes in the law. To the contrary, these provisions are intentional efforts to get all Americans to buy into a system where everyone appears to benefit while the poor and middle class are being robbed.

In the case of entitlements such as Social Security, progressives have argued for decades that a program for poor people will be a poor program. Yet, Warren Buffett hardly needs the same retirement check as his secretary. Ending welfare handouts to millionaires will strengthen, not undermine, the safety net for people who need it most.

Even Canada has adopted means testing in its retirement program by limiting benefits for high-earners. That fact is we can’t afford the system we have today. Only by adopting common-sense reforms can we sustain a safety net for those who truly need assistance.

On the tax side, both parties have been reluctant to alter tax earmarks and deductions, such as the mortgage interest deduction. These are considered sacrosanct.

Yet, it’s hard to understand how limiting the mortgage interest deductions for yachts will hurt working families. Defending spending in the tax code is not conservative. Providing tax earmarks and deductions to millionaires is a tax increase on everyone who doesn’t receive the benefit. The only way we will enact real tax reform, and grow the economy, is by lowering tax rates and broadening the base by scaling back these egregious handouts. This is precisely what President Ronald Reagan did in 1986.

Even though the super committee failed to reach an agreement on broad deficit reduction, there is no reason why the other super committee — Congress — should drag its feet. Change in Washington tends to start with small steps. There is no better place to start than scaling back ludicrous handouts to millionaires that expose an entitlement system and tax code that desperately need to be reformed.

This article was originally found at: http://www.cnn.com/2011/12/01/opinion/coburn-welfare-to-wealthy/index.html

Senator Coburn’s senate website posted this item in advance of this editorial.

(WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) today released a new report “Subsidies of the Rich and Famous” illustrating how, under the current tax code, the federal government is giving billions of dollars to individuals with an Annual Gross Income (AGI) of at least $1 million, subsidizing their lavish lifestyles with the taxes of the less fortunate.

“All Americans are facing tough times, with many working two jobs just to make ends meet and more families turning to the government for financial assistance. 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. Multi-millionaires are even receiving government checks for not working.

“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,” Dr. Coburn said.

These billions of dollars for millionaires include $74 million of unemployment checks, $316 million in farm subsidies, $89 million for preservation of ranches and estates, $9 billion of retirement checks, $75.6 million in residential energy tax credits, and $7.5 million to compensate for damages caused by emergencies to property that should have been insured. All and all, over $9.5 billion in government benefits have been paid to millionaires since 2003. Additionally, millionaires borrowed $16 million in government backed education loans to attend college. On average, each year, this report found that millionaires enjoy benefits from tax giveaways and federal grant programs totaling $30 billion. As a result, almost 1,500 millionaires paid no federal income tax in 2009.

Read the full report: here.

Supporting documents:

Centers for Medicare & Medicaid Services

Christopher Columbus Fellowship Foundation

Department of Agriculture

Department of Commerce

Department of Defense

Department of Education

Department of Energy

Department of Health & Human Services

Department of Homeland Security

Department of Housing and Urban Development

Department of the Interior

Department of Justice

Department of Labor

Department of State

Department of Transportation

Department of Veterans Affairs

Environmental Protection Agency

Farm Credit Council

Institute of Peace

Internal Revenue Service

National Endowment for the Arts

Social Security Administration

###

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