Tom Coburn: $30 Billion In Millionaires Aid Is 'Sheer Washington Stupidity'
WASHINGTON -- Millionaires are receiving billions in taxpayer-funded support every year that helps them pay for everything from child care to bad debts to boats and vacation homes, according to a report released Monday by Sen. Tom Coburn.
People who individually earned more than a million dollars in 2009 even managed to collect a total of nearly $21 million in unemployment insurance.
"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," wrote Coburn, an Oklahoma Republican, in an accompanying letter. "Multimillionaires 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."
Calling the giveaways "sheer Washington stupidity," Coburn detailed in the study more than $30 billion a year that comes out of the U.S. Treasury to aid people who make more than a million a year.
For Coburn, who describes his survey as the first-ever compilation of federal aid for the richest, such a startling figure makes no sense when most of the country is struggling to get by. He also thinks it reveals some sensible targets for Congress' stymied debt-trimming super committee.
"Even in these difficult times, the United States remains a land of opportunity and not everyone is in need of government handouts," wrote Coburn in the accompanying letter.
"The income of the wealthiest 1 percent of Americans has risen dramatically over the last decade. Yet, the federal government lavishes these millionaires with billions of dollars in giveaways and tax breaks," he wrote, referring to the growing income gap recently documented in stark fashion by the Congressional Budget Office.
"The government's social safety net, which has long existed to catch those who are down and help them get back up, is now being used as a hammock by some millionaires, some who are paying less taxes than average middle class families," Coburn contended.
And what the report "reveals is sheer Washington stupidity with government policies pampering the wealthy costing taxpayers billions of dollars every year," Coburn argued.
Coburn totaled up all the federal money for millionaires over several years that his office could find. Among the handouts for the well-heeled are:
- $18.15 million in child care tax credits
- $74 million in unemployment checks
- $89 million for preservation of ranches and estates
- $316 million in farm subsidies
- $608 million in business entertainment deductions
- $9 billion in retirement checks
- $21 billion in gambling losses
- $28 billion in mortgage breaks for mansions, vacation homes and yachts
Some of the payments, such as for Social Security and Medicare, stem from payroll taxes and are not means-tested when they are paid out. Advocates of such payments believe the government made a promise to individuals that it must keep, regardless of their wealth.
Some other payments, such as the millions received by the wealthy to preserve land or to use alternative energy sources, arise from programs that proponents consider beneficial overall, even if the rich get the money.
But Coburn doesn't see much justification for these payments, considering how well the wealthy have done over the last 30 years compared to everyone else. "Fleecing the taxpayer while contributing nothing is not the American way," he wrote.
He also sees policies that help the rich avoid taxes as government-sanctioned redistribution of wealth.
"Americans are generous and do not want to see their fellow citizens go without basic necessities. Likewise, we expect everyone to contribute and to demonstrate personal responsibility," Coburn wrote.
"Government policies intended to mainstream wealth redistribution are undermining these principles. The tragic irony is the wealth in these cases is trickling up rather than down the economic ladder," he continued. "The cost of this largess will thus be shared by those struggling today and the next generation who will inherit $15 trillion of debt that threatens the future of the American Dream."
Coburn does not argue that taxes should be raised on the wealthy, however. Simply ending giveaways for people who don't need them would help, and he recommends limiting or cutting payments to millionaires in the safety net programs; ending farm and conservation payments to the rich; means-testing tax breaks and other payouts; and reforming provisions of the tax code that help pay for vacation properties and mansions.
Follow me on Facebook.