Tom Coburn: Tax Subsidies Are Socialism

By :: July 19th, 2011

Give Sen. Tom Coburn(R-OK) credit. In a city where obfuscation and misdirection are the coin of the realm, the conservative Republican lets you know exactly where he stands. While most of his party remains mired in its  “job-killing tax increase” rhetoric, Coburn has no misgivings about eliminating tax subsidies and using the money to reduce the deficit.  His new budget plan, “Back in the Black” would scale back these deductions and credits by $1 trillion over a decade.

And in doing so, Coburn didn’t mince words:

“Tax expenditures are not tax cuts. Tax expenditures are socialism and corporate welfare. Tax expenditure are increases on anyone who does not receive the benefit or can’t hire a lobbyist...to manipulate the code to their favor.”   

Unlike most pols of both parties, who blast tax expenditures in general but refuse to name names, Coburn has a list. In fact, he has 60 pages of details on the tax subsidies he’d deep-six. He targets two of the most controversial: the tax exclusion for employer-sponsored health insurance and the mortgage interest deduction. And he takes aim at a wide range of tax breaks for economic development and energy production.

Coburn’s plan for $9 trillion in spending cuts and tax increases isn’t going anywhere. It is much too ambitious for almost anyone else in Washington and the spending cuts are far too deep. Slashing spending by $8 trillion over a decade would result in draconian reductions in government programs, including important strands of the social safety net for those who need help the most.  

But on taxes, he’s mostly looking in the right places. Among his proposals:

Cap the deduction on mortgage interest for primary residences and eliminate it for second homes.

Cap the exclusion on the value of employer-sponsored medical insurance.

Eliminate a range of tax breaks for production of alternative fuels and the purchase of energy efficient products, as well as some tax credits for the production of oil and gas.

Repeal a range of subsidies aimed at encouraging development in certain designated neighborhoods, such as empowerment zones and renewal communities.

Limit eligibility for the Earned Income Tax Credit to just five years.

Abolish a bunch of industry-specific tax breaks for railroads, agriculture, tackle box makers, NASCAR, dog and horse tracks, etc. etc.

Overall, Coburn is on target. My own list would differ from his, as, I am sure, would yours.  For instance, I don't like his EITC proposal. And I don’t  buy his socialism label (this word has become far too cheap in our political lexicon).

But the point is that Coburn has a list. Unlike those lawmakers who vote for a balanced budget Constitutional amendment that can neither pass nor succeed, or those lawmakers who support deep, but unspecified, loophole-closers, Coburn puts his cards on the table. And sooner or later, if Congress is going to get serious about deficit reduction, his colleagues must do the same.   

 

6Comments

  1. Vivian Darkbloom  ::  1:27 pm on July 19th, 2011:

    I agree. Coburn tells it like it is and he’s not afraid to put his political future on the line for the greater good.

    But, is Howard Gleckman telling it like it is?:

    “But the point is that Coburn has a list. Unlike those lawmakers who vote for a balanced budget Constitutional amendment that can neither pass nor succeed, or those lawmakers who support deep, but unspecified, loophole-closers, Coburn puts his cards on the table. And sooner or later, if Congress is going to get serious about deficit reduction, his colleagues must do the same.”

    Who, exactly, I wonder are “his colleagues” referred to here? Ryan has already put his cards on the table. Republicans in general have at least put Medicare, Medicaid and Social Security on the table. Gleckman should be referring to President Obama and “his colleagues” who are supposed to be leading this show. Not only have they not put cards on the table, they have not even ante’d up with a budget for the past two years. Mr. Gleckman, your partisanship is really showing through here.

  2. AMTbuff  ::  3:53 pm on July 19th, 2011:

    Among plans that actually achieve long-term balance, Coburn’s plan is the worst possible, except for all the others. (Apologies to Winston Churchill.)

    Show me a plan that allows promised programs and benefits to be paid, and I’ll show you a fantasy. Promises must be broken, and it will be very painful. There’s no getting around that. Coburn’s plan spends more on the needy than anything we will be able to fund after the government bond market crashes. In the real world, it’s a deal progressives should seize. In their fantasy world, they will hold out for the impossible dream of a continuation of the generous welfare state.

    This is a classic tragedy in which the protagonist will lose what he cherishes the most. The audience, in this case fiscal conservatives, knows it will end badly but the protagonist is blinded by his passions. Fiscal conservatives are rooting for progressives to retrench and save a minimal safety net before the crash destroys it, but human nature makes the crash inevitable.

  3. Michael Bindner  ::  4:17 pm on July 19th, 2011:

    Home mortgage can only be eliminated if the benefits are increased under the Child Tax Credit and made refundable – which will change the mix of housing provided, but not the amount. Capping EITC will make it impossible for some to afford to work unless doing so is part of a consolidation of child deductions. Health insurance is not going anywhere unless the entire system is replace with Single Payer insurance, which Coburn does not likely support. Still, he gets an A for effort – and I’m sure Norquist and his donors are apoplectic.

  4. SteveinCH  ::  4:50 pm on July 19th, 2011:

    Now Vivian, to be fair, the President did submit a budget in early 2012. It was reasonably specific. Of course it added $10 trillion to the debt over 10 years and increased spending massively, but it isn’t fair to say he didn’t ante up a budget. In fact, the Senate even voted on his budget. If I recall, it went down on a 97-0 vote.

  5. rationalrevolution  ::  2:41 pm on July 20th, 2011:

    Well, tax loopholes aren’t “socialism” by any means, but if that’s the kind of name calling it takes to get rid of them then so be it. They certainly are corporate welfare. His main point is true, though, every tax credit is effectively a tax increase on those who don’t get the credit.

    From a pure “free market” ideology perspective tax credits/loopholes/expenditures, whatever, and the single most distortionary and anti-free market mechanism in America today.

    Taxes in and of themselves do nothing to disrupt markets as long as they are applied equally across the board. It’s only when someone pays a different rate for doing something different, that they disrupt market mechanisms.

    This is why its been clear all along that Republicans are just a bunch of liars who are out for nothing ore than money and special interests, because if they really were principles market advocate they would be in favor of eliminating all tax loopholes, yet instead they are the major purveyors of them.

  6. puta  ::  7:30 am on May 16th, 2013:

    I’m not positive where you are getting your information, but good topic.