Stop subsidizing millionaires, says… Coburn?

posted at 11:35 am on November 15, 2011 by Jazz Shaw

If you told me that somebody had published a comprehensive report on wasteful government policies which dole out billions of dollars to the wealthiest individuals in the country, one of the last people I’d expect to find as the author would be Senator Tom Coburn.(R-OK) But that’s precisely what unfolded when I found that the senator had borrowed a tag line from 1970s television programming and released, “Subsidies of the Rich and Famous.”

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.

Digging into the meat of this, it actually goes in an entirely different direction than what I’d imagined from reading the title. We can make a fair and valid argument against jacking up the taxes on one particular set of Americans (i.e. the wealthy) but that’s not what Coburn is talking about here. It’s a point which Veronique de Rugy makes over at National Review.

While I don’t think that millionaires should be targeted, as a group, for tax increases, I don’t think the government should be giving away money to them, either. It’s stunning how little attention is paid to the absurdity of government spending taxpayer dollars on millionaires and billionaires…

What is more striking here is the absurdity of a system that taxes people on one hand and gives back on the other. This is also true for the middle class, which is heavily taxed and receives large amounts of government subsidies. I can’t imagine that this system is efficient. Wouldn’t it make more sense to keep our money and pay for most goods and services ourselves? After all, most of the stuff that the federal government pays for isn’t by nature a public good and should be supplied at the state and local levels, or at the private level.

The reality is that most of the complaints here deal with largely cosmetic issues in terms of the raw numbers. We’re talking about a figure in the single – or at most double – digits of billions of dollars. (Insert the usual caveat here about the fact that this is a huge sum of money for any one individual, but it’s peanuts compared to our annual deficit.) But even if this isn’t a discovery which would yield enough cash to solve our fiscal woes, that doesn’t mean that it’s something which fiscal conservatives shouldn’t look into. It does seem fairly insane on the face of it.

But nothing is ever simple, and this report is no exception. Some of that money being paid out may sound outrageous to the middle class rank and file, but portions of it would be rather hard to take away. Certainly we can argue in favor of means testing for unemployment checks and farm subsidies are just a bad idea to begin with. But the report also includes $9 billion of retirement checks. Retirement is something you earn over a lifetime of work, so are we really justified in telling somebody that they can’t collect it just because they were successful in life?

Some of these expenses can certainly be cut. But we need to be careful not to institute a policy where it becomes accepted political ideology to simply pick the pockets of the wealthy whenever we see a dime going their way. Still, it’s an interesting report and we’ll have to wait and see if it translates into any concrete legislation in congress.

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OT: obama forgets where he was born

ConservativePartyNow on November 15, 2011 at 11:37 AM

Do away with subsidies, tax credits and write-offs, and impose a flat rate that’s reasonable.

forest on November 15, 2011 at 11:39 AM

I hate where this is going.

angryed on November 15, 2011 at 11:40 AM

OT: obama forgets where he was born

ConservativePartyNow on November 15, 2011 at 11:37 AM

Is Hawaii no longer one of the 57 states?

Doughboy on November 15, 2011 at 11:40 AM

If you told me that somebody had published a comprehensive report on wasteful government policies which dole out billions of dollars to the wealthiest individuals in the country, one of the last people I’d expect to find as the author would be Senator Tom Coburn.(R-OK)

?????

Coburn has a 98% lifetime ACU rating and is considered one of the top 3-5 conservative members of the Senate.

I don’t understand this at all.

aquaviva on November 15, 2011 at 11:41 AM

Flat tax. Pick a number (%)and everybody pays. No deducts, no subsidies, no nothing= booming economy.

Tim Zank on November 15, 2011 at 11:41 AM

So if an evil rich guy wins $100K gambling, he pays 35% tax on it. But if he loses $100K gambling, he doesn’t get to deduct the loss? This is the reverse of govt bailouts for real estate. Your house doubles in value, you keep the profit. Your house loses 50% of value, govt steps in to bail you out.

Two wrongs.

angryed on November 15, 2011 at 11:41 AM

OT: obama forgets where he was born

ConservativePartyNow on November 15, 2011 at 11:37 AM

The latest kooky theory is that he was born in NYC, and that he’s the son of Malcolm X.

Ward Cleaver on November 15, 2011 at 11:42 AM

Most of those in dc would not vote for a bill about this. They have and are getting all the goodies from the tax loopholes. They write the bills for their donors money and theirs, and pass the bill. bho’s donors have gotten 80% of the money, such as solyndra and others.
L

letget on November 15, 2011 at 11:43 AM

We are all socialists now.

*ducks*

Ward Cleaver on November 15, 2011 at 11:44 AM

The 40 GOP congressmen who want to Raise Taxes, including RuPaul
http://americansforprosperity.org/110611-40-house-republicans-ask-super-committee-higher-taxes

jp on November 15, 2011 at 11:44 AM

OT: obama forgets where he was born

ConservativePartyNow on November 15, 2011 at 11:37 AM

Hawaii is in Asia… duh!

tetriskid on November 15, 2011 at 11:45 AM

“But we need to be careful not to institute a policy where it becomes accepted political ideology to simply pick the pockets of the wealthy whenever we see a dime going their way.”

Um…where have you been?

It’s a little late for that. We have an entire political culture and party dedicated to almost nothing else.

tbrosz on November 15, 2011 at 11:46 AM

ok… right after Congress stops exempting itself from all the laws that apply to me…

Khun Joe on November 15, 2011 at 11:47 AM

Flat tax, no loopholes for ANYONE…and, yes, as Mrs. Bachmann says…EVERYONE pays.

SouthernGent on November 15, 2011 at 11:47 AM

Coburn is probably one of the MOST likely politicians to come out with such a report of wasteful gov’t spending.

Unless I’m missing something, I still don’t understand Jazz’s first sentence.

Are we ripping on Tom Coburn now?

aquaviva on November 15, 2011 at 11:47 AM

Can anyone really see John Kerry voting in favor of ending subsidies for yachts?

amazingmets on November 15, 2011 at 11:48 AM

Ah oh.

Even left leaning Biz Insider is using the word ‘scandal’ in it’s reporting of the latest Solyndra news.

http://www.businessinsider.com/scandal-deepens-energy-department-pushed-solyndra-to-wait-to-announce-layoffs-until-after-midterm-elections-2011-11

DrW on November 15, 2011 at 11:50 AM

Can anyone really see John Kerry voting in favor of ending subsidies for yachts?

amazingmets on November 15, 2011 at 11:48 AM

Sure. Because on page 817 of the bill there will be a line about exempting yachts of a certain size, certain make, certain model with certain serial number….which all just coincidentally happen to match the Kerry yacht.

angryed on November 15, 2011 at 11:51 AM

We’re talking about a figure in the single – or at most double – digits of billions of dollars.

Everrett Dirksen, where are you when we need you the most!

JohnGalt23 on November 15, 2011 at 11:51 AM

“So if an evil rich guy wins $100K gambling, he pays 35% tax on it. But if he loses $100K gambling, he doesn’t get to deduct the loss?” He can deduct losses to the extent of winnings. So if a professional gambler lost 20K and won 40K he could deduct the 20k as a business expense incurred in winning the 40K.

tommyboy on November 15, 2011 at 11:52 AM

OT: Gov. Palin will reveal tonight on Greta Van Susteren’s On the Record which candidate she believes has the best chance of beating Barack Obama in 2012 – according to promotional language on Fox News’ home page and in a promo vid

Gee, I wonder what the QOTD thread will be about tonight. BTW, I’ll bet Palin is relieved she didn’t make this announcement 48 hours ago. She might’ve come out in favor of Cain.

Doughboy on November 15, 2011 at 11:53 AM

OT: obama forgets where he was born

ConservativePartyNow on November 15, 2011 at 11:37 AM

Can’t wait to see the SNL spoof on this!

silvernana on November 15, 2011 at 11:53 AM

Can’t wait to see the SNL spoof on this!

silvernana on November 15, 2011 at 11:53 AM

You’ll be waiting a while.

Doughboy on November 15, 2011 at 11:54 AM

Is there a Facebook club for all the acecoolguys at Hot Air who support a flat tax?

…cuz I have this friend

Jeddite on November 15, 2011 at 11:58 AM

Let’s tax the millions of dollars that are donated into every political campaign!

jeffn21 on November 15, 2011 at 12:01 PM

A flat tax will never happen. You can’t buy votes with a flat tax.

angryed on November 15, 2011 at 12:01 PM

I don’t understand this at all.

aquaviva on November 15, 2011 at 11:41 AM

I don’t get it either. I wish there were 100 Coburns in the senate.

bopbottle on November 15, 2011 at 12:01 PM

We’re all socialists now.

stenwin77 on November 15, 2011 at 12:05 PM

“Fascism should more properly be called corporatism, since it is the merger of state and corporate power.” Benito Mussolini

How about no more welfare?

Top to bottom huge issues plague America because government inserts itself where it doesn’t belong.

Would there be a single illegal alien in this country without welfare?
Would there be a fraction of the corrupt and harmful lobbying?

I don’t think so.

Speakup on November 15, 2011 at 12:09 PM

…one of the last people I’d expect to find as the author would be Senator Tom Coburn.(R-OK)

As with the other commenters asking, what exactly did you mean by this, Jazz? It implies that Tom Coburn is all about government waste, which (as other have also pointed out) he’s not – he’s one of our best Senators imo, certainly one of the most reliably conservative. Do tell…

elcapt on November 15, 2011 at 12:12 PM

Flat tax. Pick a number (%)and everybody pays. No deducts, no subsidies, no nothing= booming economy.

Tim Zank on November 15, 2011 at 11:41 AM

I agree on the flat tax. I believe there should be some deductions – charitable giving (charities, churches, other nonprofits which subsist on donations) being one of them. It’ll give the Big Accounting something to do Feb. through April.

looking4statesmen on November 15, 2011 at 12:16 PM

I’ve got a crazy ideal. How about the government doesn’t target any group specifically regardless of whether it’s favorable or unfavorable attention.

DFCtomm on November 15, 2011 at 12:20 PM

Wait. So now we’re in favor of welfare for the rich?

lorien1973 on November 15, 2011 at 12:36 PM

The government should stop picking winners and losers, stop allowing the rich benefits that average Americans do not have.

portlandon on November 15, 2011 at 12:50 PM

In what reality is keeping the money you earned defined as “subsidizing” you?

disa on November 15, 2011 at 12:50 PM

Wait. So now we’re in favor of welfare for the rich?

lorien1973 on November 15, 2011 at 12:36 PM

No. We’re in favor of the Rule of Law, which is the concept that the law applies to everyone equally and that no one is above the law. This is the very definition of “fairness”.

The liberal definition of “fairness” is to treat everyone differently based upon how much they make… which is UN-fair.

dominigan on November 15, 2011 at 1:02 PM

It wasn’t a “hit” on Coburn. What I tried to convey – apparently without success – was that the TITLE of the report could lead one to think it was some sort of “attack the rich” diatribe, which could have gone so far as to talk about jacking up tax rates on the higher brackets. It turned out to not be that. But if you re-read the opening paragraph, which I think I began with, “when I see a report with the title of…” or something to that effect, that’s what I was going for.

Jazz Shaw on November 15, 2011 at 1:02 PM

aquaviva on November 15, 2011 at 1:07 PM

Meh about the report, on to what’s important. Am I the only one that finds Veronique de Rugy strangely attractive? Maybe it’s her accent or her brain, not sure.

lowandslow on November 15, 2011 at 1:16 PM

So if an evil rich guy wins $100K gambling, he pays 35% tax on it. But if he loses $100K gambling, he doesn’t get to deduct the loss? This is the reverse of govt bailouts for real estate. Your house doubles in value, you keep the profit. Your house loses 50% of value, govt steps in to bail you out.

Two wrongs.

angryed on November 15, 2011 at 11:41 AM

As I understand the tax code, you may write off gambling losses against gambling winnings. But you may not write off gambling losses simply against your income.

mdenis39 on November 15, 2011 at 1:21 PM

Do people have a problem with Coburn pointing this stuff out? Really?

thirteen28 on November 15, 2011 at 1:34 PM

Many of the people he highlights are whiny Democrats. Bruce Springsteen, anyone? Jon Bon Jovi?

Who likes using tax dollars to pay welfare to millionaires and billionaires?

MTF on November 15, 2011 at 1:40 PM

Stop subsidizing millionaires, says… Coburn?

What’s unconservative about that? Why should the federal govt subsidize anything or anyone?

Would you be happy with him if he said, “Susidize millionaires more”?

???

Akzed on November 15, 2011 at 2:00 PM

Someone needs to tell senator Coburn that allowing people to keep more of their money is not welfare, you moron. Subsiding? Really, how is a vacation home interest deduction welfare or a subsidy. Coburn is playing right into the libtards hands.

David in ATL on November 15, 2011 at 2:16 PM

His report is even worse than I originally thought it would be. Coburn will become the man most quoted by the libtards and progressives next year. Let’s see what else he thinks needs to be adjusted. He thinks means testing is the way to fix social security and medicare. Wow, why not simply jack up the marginal tax rates on the millionaires and say they no longer will receive any SS or Medicare benefits, asshole. He goes after the ability of investment property owners to deduct the cost of maintaining that investment. So if I buy a building and rent it out I guess I should be taxed on my gross rent receipts and not on my operating profits. Someone please tell me Coburn suffered a stroke the other day and he really doesn’t mean any of this leftist crap.

David in ATL on November 15, 2011 at 2:31 PM

Someone needs to tell senator Coburn that allowing people to keep more of their money is not welfare, you moron. Subsiding? Really, how is a vacation home interest deduction welfare or a subsidy. Coburn is playing right into the libtards hands.

David in ATL on November 15, 2011 at 2:16 PM

That’s not what Senator Coburn was talking about, David. Read the report in its entirety before you go off on him in a huff.

Scotty Pippen, Jon Bon Jovi, Ted Turner, and other extremely wealthy individuals receive farm subsidies for farms and ranches they have NOTHING to do with the day-to-day running of, and these guys would be millionaires without those subsidies. That kind of belies the idea that the small family farmer can’t exist without subsidies, which cuts to the heart of Coburn’s thesis. Coming from a state for which agriculture is an economic lynchpin (South Dakota), I’m with Coburn on this one.

gryphon202 on November 15, 2011 at 2:36 PM

Who likes using tax dollars to pay welfare to millionaires and billionaires?

MTF on November 15, 2011 at 1:40 PM

Obama.

gryphon202 on November 15, 2011 at 2:37 PM

Do people have a problem with Coburn pointing this stuff out? Really?

thirteen28 on November 15, 2011 at 1:34 PM

“Jazz Shaw” is a New York liberal “Republican”… people like him are the reason we are in this mess.

He is complaining that Coburn is exposing welfare to millionaires.

Booo Hooo.

tetriskid on November 15, 2011 at 4:09 PM

I found that the senator had borrowed a tag line from 1970s television programming and released, “Subsidies of the Rich and Famous.”

Robin Leach must have borrowed Mr. Peabody’s Wayback Machine for “Lifestyles of the Rich and Famous,” which aired from 1985 to 1995, to have been part of “1970s television programming.” ( See http://en.wikipedia.org/wiki/Lifestyles_of_the_Rich_and_Famous)

Maybe it’s time for Hot Air to stop doing what it rightly criticizes (other) lazy journalists for doing, namely, not taking a few seconds to fact-check.

bgoldman on November 15, 2011 at 4:57 PM

So if an evil rich guy wins $100K gambling, he pays 35% tax on it. But if he loses $100K gambling, he doesn’t get to deduct the loss? This is the reverse of govt bailouts for real estate. Your house doubles in value, you keep the profit. Your house loses 50% of value, govt steps in to bail you out.

Two wrongs.

angryed on November 15, 2011 at 11:41 AM

Unless the law has been changed, you can deduct gambling losses only as an offset to declared winnings. Unlike Dr. Coburn, I don’t see any reason why the rules should be different for the wealthy.

Mortgage deductions for second homes (and, again, unless the law has been changed, the deduction is available for only the second home, not the third, fourth, fifth, etc) were established not for the benefit of the wealthy but for the benefit of the real estate industry. Lots of not-rich people own vacation homes. I’m in the camp that says lower the tax rates and eliminate most, if not all, deductions for everybody.

I don’t want to see us getting to a point where people who earn above a certain income level (who, after all, gets to define what “rich” is) are expected to pay taxes to fund entitlements, but are not allowed to benefit from them. If most politicians had their druthers, the wealthy would pay SS/Medicare taxes on 100% of their income, but be means tested out of receiving those benefits. Why should the wealthy be expected to finance everyone else’s retirements.

SukieTawdry on November 15, 2011 at 5:15 PM

I question the timing of Coburn’s “report.” Why this, why now? I think he’s preparing us for the Republicans’ capitulation on increasing taxes. The Super Committee is going to give us something that will do nothing to decrease spending, nothing to address the deficit, nothing to address the debt, but will provide for increased “revenue” without meaningful tax code reform. We will hate it, but Republicans will tell us it’s the absolute best we can do. Dr. Coburn is softening us up.

SukieTawdry on November 15, 2011 at 5:57 PM

Do away with subsidies, tax credits and write-offs, and impose a flat rate that’s reasonable.

forest on November 15, 2011 at 11:39 AM

Yes.

Count to 10 on November 15, 2011 at 7:42 PM

That’s not what Senator Coburn was talking about, David. Read the report in its entirety before you go off on him in a huff.

Scotty Pippen, Jon Bon Jovi, Ted Turner, and other extremely wealthy individuals receive farm subsidies for farms and ranches they have NOTHING to do with the day-to-day running of, and these guys would be millionaires without those subsidies. That kind of belies the idea that the small family farmer can’t exist without subsidies, which cuts to the heart of Coburn’s thesis. Coming from a state for which agriculture is an economic lynchpin (South Dakota), I’m with Coburn on this one.

gryphon202 on November 15, 2011 at 2:36 PM

. I was commenting on the parts of the report, which I read, that I found the most offensive. Yes, he is pushing meanings testing. BS. He is also attacking successful people owning investment property…that is pure populist BS.

David in ATL on November 15, 2011 at 9:48 PM