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As Congress wrestles with how to bring down the historically high budget deficit, Sen. Tom Coburn (R-Okla.) today released a report that showed that under the current tax code, millionaires are receiving billions in federal aid.
“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,” Corburn said in a release accompanying the report. “Multi-millionaires are even receiving government checks for not working.”
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, according to Coburn’s report.
In total, more than $9.5 billion in government benefits have been paid to millionaires since 2003, the report said. Additionally, millionaires borrowed $16 million in government-backed education loans to attend college. On average, each year, the 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.
The report comes as a bicameral committee of 12 lawmakers is working on a plan to cut the deficit by at least $1.2 trillion over 10 years. They have until Nov. 23 to vote on a plan. The deficit for fiscal 2011, which ended Sept. 30, was $1.3 trillion, according to the Congressional Budget Office, and amounted to 8.6 percent of the gross domestic product — the third-highest percentage of GDP recorded since 1945.
In negotiations, Democrats have pushed to raise taxes on the wealthy to raise revenue to help stimulate the weak economy and trigger companies to hire. The unemployment rate was 9 percent for October.
But Republicans have balked at the idea because they argue it would hurt businesses and keep them from making investments and hiring.
Coburn indicated his report points to an area where lawmakers could look to reduce waste.
“We should never demonize those who are successful,” Coburn’s report said. “Nor should we pamper them with unnecessary welfare to create an appearance everyone is benefiting from federal programs.
“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,” the report said. “These consequences are the results of shortsighted spending and tax policies like those outlined in this report that should be eliminated.”