“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.”
It might come as shock to those on the right who read this that these are not the ramblings of an anti-Capitalist, left-leaning Democrat. They come from a report recently released from the office of ultra-conservative Oklahoma Senator Tom Coburn. Coburn states in his report entitled Subsidies of the Rich and Famous, that as “families across the country [are] struggling to make ends meet during these economically trying times, many are left with few options so they are turning to the government – some very reluctantly – for assistance.” Some may recall that it was Coburn who single handedly blocked the efforts of the full Senate in 2010 to extend unemployment benefits to the millions of people who had lost their jobs as a result of the financial collapse of the free-market.
Coburn is also part of the Republican bloc in the Senate where minority leader Mitch McConnell has stated that the “single most important thing we want to achieve is for President Obama to be a one-term president.” Thus, every effort where the Obama administration has attempted to alleviate the plight of “families across the country struggling to make ends meet”, has been blocked by Senator Coburn and the rest of the GOP.
Coburn’s report is not testament to any shift in political views regarding government aid. He still lamely claims that taxing the rich because they “are getting too much of the economic pie … is no different than taking a dollar from one pocket and putting it into another in the same pair of pants.” That would only be true if the wearer of those pants was also a millionaire. Entitlement programs and aid grants that provide a safety net for the poor and unemployed during tough economic times is hardly money that goes to people who really don’t need it.
But unlike many of his Republican/Tea party colleagues, Coburn appears to have seen the writing on the wall from the ever growing and popular Occupy Wall Street movement that has brought home the reality of the vast income disparity between the wealthy 1% in this country and everyone else.
His report is a worthy attempt to show that “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.” His report aptly demonstrates that billions have been going to millionaires over the last decade for things like tax write offs in the form of farm subsidies to people who neither actively work or even live on a farm to some 60,000 wealthy individuals who have filed for Medicare Part B with modified adjusted gross incomes of $1,000,000 or more.
He also makes a great case for means testing of all entitlement programs like Social Security, Medicare/Medicaid and Unemployment benefits. In 2009 over 38,000 people with adjusted gross incomes of $1 million or more, collected $1,142,204,000 in Social Security benefits, an annual average of $30,780 for each recipient. Though that’s a wapping amount for most income earners it is only about 3% of those who made $1 million each year and about 0.30% for those who made over $10 million.
Granted, even some millionaires paid into the social security trust fund during their lifetime as wage earners. But with high unemployment rates today where there are fewer workers available to contribute their share through payroll taxes and the aging baby boom generation starting to retire, the strain on the trust fund has created a deficit in receipts for the first time in nearly 30 years. The system is capable of paying 100% of benefits until 2036 but if we don’t make necessary adjustment it will only be able to pay 75% of benefits after that. Means testing would reduce the payout to millionaires and even eliminate benefits for some, providing needed revenue for those wage earners who depend on Social Security benefits as their sole source of retirement funds. “Returning the purpose of the program to a need-based service instead of one available universally may help keep Social Security solvent for future generations”, says Coburn
Medicare/Medicaid is in even worst shape than Social Security because of the increase in high health care cost and fraud abuses by health care providers. For millionaires to apply for this entitlement program when their resources allows them buy some of the best health care coverage that the private sector offers is ludicrous. According to Forbes reporter Janet Novack last month, a “couple on Medicare with a $428,000 AGI will benefit from a 13 percent decrease in their Part B premium payments. At the same time, the majority of Medicare Part B participants who pay the lowest premiums will see their monthly premiums increase slightly, offsetting the first cost-of-living-adjustment (COLA) increase recipients have seen in about 3 years.”
To deplete these vital resources for low income and handicapped individuals in order to prevent a millionaire’s resources from diminishing is ludicrous. How many of these very wealthy people have referred to Medicaid/Medicare as a “socialist” program that is depleting tax payers of their hard-earned wages?
Fraud is apparently rampant within the Unemployment Insurance (UI) Program too. This entitlement program that also receives contributions from wage earners through their payroll taxes as well as employer contributions, serves to alleviate the loss of wages when workers have been laid off for reasons other than poor performance. Without these benefits many families would be strapped to pay for food and rent until they can find other work. Yet Coburn’s report showed there were those collecting unemployment benefits who were “also earning millions of dollars in the same year. In 2009, the Internal Revenue Service reported that 2,362 millionaires collected a total of $20,799,000 in UI. Eighteen individuals reporting an adjusted gross income of $10,000,000 or more also received $12,333 on average in UI in 2009, for a total of $222,000.”
Angela Wade, who has also reported on this at her Blue States blog has broken the benefits down cited in Coburn’s study to show just how much revenue is being lost for essential social programs to people who are far from being in need.
- $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
Though it is encouraging to see Senator Coburn present such a detailed outline of the waste of needed government revenue going to people within the top 2% of income earners in this country, it will be interesting to see if this just a head jerk to feign concern about the need to correct such abuses that occur through federal subsidies and policies that neglect to prevent unethical practices by those in the top tier income groups.
His conservative creds are still locked into the notion that “government policies intended to mainstream wealth redistribution are undermining these principles” that expects “everyone to contribute and to demonstrate personal responsibility”. Yet the expectations one sees coming from this study suggests that Coburn is not in the same camp with other Republicans who see the removal of existing tax subsidies as onerous “tax cuts”.
Coburn has boasted that this study is the first comprehensive effort that has revealed how nearly $30 billion in giveaways and tax breaks has fleeced the American taxpayer. We can only now hope that he will step up to the plate and vigorously defend this data and convince his fellow Republicans to step away from their pro-corporate entrenched view of supporting the haves to the detriment of the have-nots in our country. Or will we see him wilt in the face of the strong opposition from the right-wing extremists who have taken over the Grand Old Party of Lincoln?