Dec. 9 (Bloomberg Politics) — Tom Coburn has one heck of a stocking stuffer for his Senate colleagues.
The Oklahoma Republican, who is retiring before the next Congress convenes in January, is releasing a 300-plus-page report on the tax code today. "Dr. No," as he's known, has compiled what amounts to a greatest-hits collection of tax breaks he wasn't able to erase from the federal code.
His targets include the rich, the famous and the powerful. Coburn slams tax-free celebrity charities, including the foundations of Lady Gaga and Kanye West, for giving little money to actual charities. Coburn hits a tax deduction that millionaire gamblers can use to write off losses. Big companies don't escape Coburn's eye either. The introduction alone dings Google, Intel, Boeing and Apple for their use of the research tax credit.
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"Nearly every politician on both sides of the aisle claims to want to make the tax code simpler and fairer, but each time Congress takes up so-called tax reform, the result is the exact opposite," the report says.
Tax breaks—from intentional incentives to loopholes exploited by creative lawyers—total about $1 trillion a year. That's a staggering number, and, in theory, you could get rid of all of them and send tax rates plummeting.
Here's the problem: The smallest ones are the breaks that industries defend most vigorously. Coburn can grouse about breaks for historic preservation that benefited the Boston Red Sox and Washington's Hotel Monaco all he wants. But the coalition of preservationists and real estate developers who use the break have more than enough clout to keep it. And lawmakers don't want to give up the chance to do more ribbon-cuttings.
On the flip side, the biggest items are the ones Americans love the most. Try prying the mortgage interest deduction out of our cold, dead 1040s or telling us that employer-provided health insurance is really taxable income.
So what's on Coburn's naughty list? A sampling:
* The parsonage housing allowance that lets religious leaders get tax-free housing. Coburn appends a dig about a North Carolina pastor's $5,000 air-conditioned doghouse.
* Tax-exempt clubs. Coburn includes a picture of the Yale Club in New York and wonders why it deserves a break.
* Student loans. Letting people deduct their interest costs just encourages colleges and universities to raise tuition, Coburn argues.
* Indian coal tax credit. If Congress wants to aid the Navajo, the Crow and the Hopi that have coal on their lands, Coburn says, Congress should just send them a check.
Needless to say, Coburn's ideas haven't attracted a ton of support in his 10 years in the Senate. You may hear some happy talk about tax reform, but odds are that Coburn won't even get a polite thank-you note from fellow senators for the copy of his "Tax Decoder."
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