A new report from a Republican lawmaker details how, under the current Tax Code, the federal government is giving away billions of dollars to millionaires, subsidizing their lifestyles with taxes paid by the less well-to-do.
The report, entitled “Subsidies of the Rich and Famous,” was released by Sen. Tom Coburn, R-Okla., a deficit hawk who has campaigned to end a variety of tax subsidies, particularly for ethanol. In the new report, Coburn points to a variety of government subsidies and tax credits that go toward people with adjusted gross incomes of $1 million and up, including $9 billion worth of retirement checks, $316 million in farm subsidies, $89 million for preservation of ranches and estates, $75.6 million in residential energy tax credits, $74 million worth of unemployment benefits, and $7.5 million to compensate for damages caused by emergencies to property that should have been insured.
In addition, according to the report, millionaires claimed $27.7 billion in mortgage interest deductions, $64.3 billion in rental expenses deductions, $21 billion in deductions for gambling losses, $607.7 million in business entertainment expenses deductions, and $128 million in canceled debt deductions.
“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,” Coburn said in a statement. “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. “
All and all, over $9.5 billion in government benefits have been paid to millionaires since 2003, according to Coburn’s office. In addition, millionaires borrowed $16 million in government-backed education loans to attend college. On average, each year, his 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.
Earlier this year Coburn's office released a deficit reduction plan that recommended ending a variety of tax breaks and taxpayer-funded subsidies to save an estimated $9 trillion over 10 years (see Republican Senator Coburn Proposes Eliminating Tax Breaks as Part of Deficit Plan).
“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,” said Coburn. “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.”
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