Paul L. Caron

Tuesday, December 9, 2014

Sen. Coburn Releases 300-Page Tax Decoder

Senator Tom Coburn (R-OK) today released Tax  Decoder:

This report, Tax Decoder, is intended to decode the tax code for every taxpayer. It reveals more than 165 tax expenditures costing over $900 billion this year and more than $5 trillion over the next five years.

It is nearly impossible to know who is benefiting from the tax code because it lacks any real transparency or accountability. This is not unintentional. The Senate Finance Committee recently rejected an amendment that would have required the recipients of some tax credits to be publicly listed in the website.10 The recipients of these tax breaks know who they are, so it seems reasonable for those who are paying the taxes to provide the benefits should know as well. 

Tax Decoder attempts to provide a detailed and comprehensive overview of the code for all taxpayers. It includes the background, cost, and primary beneficiaries of each provision along with specific examples of some of the recipients of certain tax breaks. It covers well known tax provisions as well as others that are more obscure. ...

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. There were over 4,600 changes to the tax code made between 2001 and 2012.20 These changes have only made the tax code more complicated and less fair.

This month Congress will likely approve a “tax extenders” bill, reauthorizing dozens of expired tax perks for select companies and industries. The legislation will cost more than $40 billion and will include many tax breaks discussed in the report, including the wind production tax credit, the New Markets Tax Credit, and tax breaks for NASCAR, Hollywood, and tuna manufacturers.

This has become an annual ritual for Congress to rubber stamp the continuation of expiring tax earmarks and loopholes with little debate or discussion. Most members of Congress refuse to name even one specific tax break they would support eliminating.

Tax Decoder is not a comprehensive tax reform plan. It is an educational reference guide designed to equip taxpayers and lawmakers with the details needed to thoughtfully reconsider many aspects of the existing tax code. Ideally Congress would throw out the entire tax code and start over. But at the very least, Congress should make the code simpler, fairer and flatter. This report provides a list of options for Congress to streamline and simplify the tax code to achieve that goal. While many of the tax breaks identified throughout this report should be phased out or eliminated, others could also be reformed to better achieve their intended purpose.

Bloomberg, The Worst Tax Loopholes in America, Revealed

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