Practice what you preach: Will Congress curb tax breaks?

by Matthew Glans on November 3, 2011

Tax breaks and loopholes in the US tax code are a frequent debate point for both Republicans and Democrats, but are legislators truly seeking to close these tax breaks when many of them are adding even more, including President Obama himself? In a new article by Paige Winfield Cunningham in the Washington Times, Paige argues that many of the legislators preaching for better budget management continue to add tax breaks for their preferred projects.

“Even as the government’s dim fiscal picture pushes all sides to try to sweat savings out of the budget and all sides say carve-outs should be on the table, Republicans and Democrats on Capitol Hill are proposing their own special breaks, known as “tax expenditures” in legislative-speak, for items such as clean energy and student-loan repayments for veterinarians.

“We’re our own worst enemy,” said Sen. Tom Coburn, Oklahoma Republican and a vocal advocate for reforming the tax code. “And that’s based on parochialism and lobbying. You have to reform the tax code for two reasons — we’re wasting a ton of money and it’s stifling growth.”

After the last major tax reform was enacted in 1986, tax expenditures have risen steadily each year since the mid-1990s. They include breaks that benefit millions — such as deductions for retirement savings, charitable contributions and employer-sponsored health plans — as well as ones targeting much smaller groups of people.

The tax code is now littered with more than 200 credits, deductions or other tax expenditures, and the number has risen moderately over the past five years to reach roughly $1 trillion in revenue that the government would otherwise be collecting.”

Heartland Institute vice president Eli Lehrer commented in the article that these tax breaks are a systemic problem, originating for nearly every member of Congress and cover items and projects that most people wouldn’t suspect require such tax breaks.

“Seems every member of Congress has a special tax break,” said Eli Lehrer, vice president of the Heartland Institute. “I’ve seen everything from retrofitting your house for earthquakes to donating organs.”

While some legislators have undertaken efforts to curb the growth of these tax breaks, more often then not these efforts end in partisan gridlock.

Other taxpayer watchdog groups argue that both parties share a role in perpetuating this hypocrisy.

“Steve Ellis, vice president of Taxpayers for Common Sense, said he sees Democrats often more willing to go after expenditures, with many Republicans accusing them of increasing taxes. But whatever lawmakers say about expenditures, special interests often prove too powerful to deny, he said.

“Certainly there’s a lot of lawmakers up there talking out of both sides of their mouth,” he said. “Certainly, that’s not entirely surprising that they’ll have the one hand out for a tax break while they’re wagging the other finger at the code.”

Paige Winfield Cunningham’s complete article in the Washington Times can be found online at:

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