Dec 12 2012
Says tax code cannot be a favor factory for the well-connected
Dr. Coburn sent the following letter to President Obama, Speaker Boehner, House Minority Leader Pelosi, Senate Majority Leader Reid, and Senate Minority Leader McConnell:
Dear President Obama,
Most Americans view Washington as broken, incapable of solving even the simplest of problems, much less the debt crisis threatening the very future of our nation. They have good reasons to believe so.
However, while serving on the National Commission on Fiscal Responsibility and Reform, I was encouraged members of both political parties were willing to make tough choices and support a plan that put the future of our nation before partisan politics. While the proposal was not perfect, it was balanced. It would have reduced the deficit by $4.1 trillion over a decade by reforming entitlements and the tax code, at the same time, and cutting lower priority and unnecessary spending, including defense. Over the past two years, I have introduced a number of bills to reduce the deficit, each with a Democrat co-sponsor, and offered a series of amendments to save taxpayers billions of dollars that were approved overwhelmingly—in some cases unanimously—by the Senate. Along with Senators Mark Udall and Jon Tester, for example, I introduced a bill (S. 310) and offered an amendment (S. Amdt. 281) —that passed 100 to zero to end unemployment payments to millionaires.
The will to solve our nation’s fiscal problems exists, but missing is the courageous leadership needed to forge a bipartisan solution. Addressing the looming fiscal cliff provides the latest opportunity to demonstrate we are capable of putting our differences aside to do what is best for the nation.
Letting all of the 2001 and 2003 tax rates expire would raise taxes on every American, not just the wealthy, creating a financial calamity that could trigger another recession before we have even recovered from the current economic downturn.
Before any American is asked to pay a penny more in taxes we must first make a good faith effort to clean up the budget, including the tax code, by closing loopholes and eliminating tax giveaways. It would be unconscionable to tax mom and pop small businesses on Main Street while extending tax giveaways for lobbyists and special interests on K Street. Washington politicians are threatening to shove hardworking Americans over the fiscal cliff to keep the tax code favor factory for the well-connected open for business.
Congress should not extend the dozens of expiring tax breaks for some of the country’s biggest corporations and giveaways for special interest groups, from banks on Wall Street to movie producers on Sunset Boulevard.
The Finance Committee recently approved the extension of $72 billion of tax benefits, including New Markets Tax Credits for big banks, economic development tax credits for American Samoa businesses, special allowances for NASCAR sports complexes, and tax credits for maintaining railroad tracks, buying electric vehicles, and wind energy production companies.
Attached is a list of tax earmarks set to expire at the end of the year, that if allowed to do so, could save $18.5 billion without raising tax rates on any hard working Americans. Beyond these expiring tax earmarks, there are plenty of other loopholes and giveaways in that tax code that could be axed, which could reduce the deficit by as much as $100 billion over ten years.
The first budgetary choice Washington should make to address our deficit is to eliminate these and other carve-outs in the tax code, refusing to include them as part of the end of year tax package. Doing so will simplify the code while making it fairer and flatter and will reduce the deficit without hiking rates on hard working Americans.
Tom A. Coburn, M.D.
This letter is the latest action by Dr. Coburn to reform special interest tax expenditures:
- In early December 2012, Dr. Coburn identified 10 expenditures hidden in the tax code.
- In October 2012, Dr. Coburn laid out tax giveaways, such as those to the NFL and PGA, in his annual Waste Book.
- In November 2011, Dr. Coburn released "Subsidies of the Rich and Famous," a report illustrating how under the current tax code, the federal government subsidizes individuals with an Annual Gross Income (AGI) of at least $1 million to help fund their lavish lifestyles with the taxes of the less fortunate.
- In September 2011, Dr. Coburn sent a letter to members of the Joint Select Committee on Deficit Reduction outlining more than $300 billion in deficit reduction by eliminating or reforming 12 expenditures in the tax code.
- In July 2011, Dr. Coburn outlined $9 trillion in deficit reduction in his report, "Back in Black," while devoting a section explaining how special preferences in the tax code are estimated to account for over $ 1 trillion in annual spending.
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