Senator Coburn Publishes the Tax Decoder

Senator Coburn's office yesterday published the "Tax Decoder", a 300+ page guide describing more than 165 tax expenditures. The report highlights inefficiencies in many of the current tax breaks, drawing attention to areas where these breaks have been abused or provide an over-sized benefit to one specific industry, "allow[ing] Uncle Sam to put a thumb on the scale, placing politicians instead of markets at the center of capital allocation." See the full document here.

The report covers nearly every tax break. It describes attention-grabbing breaks like a tax break for a tuna company, breaks for NASCAR tracks, tax-free financing of stadiums built for private sports teams, and private foundations used by celebrities. It also tackles the largest tax expenditures, providing a serious treatment of large provisions like accelerated depreciation, the child tax credit, and the mortgage interest deduction. As the report says:

This report is meant to help decode the tax code for the public and policymakers alike, exposing special giveaways and surprising tax preferences unknown to many Americans who cannot afford tax lawyers or accountants.

The report "is designed to provide the building blocks of comprehensive tax reform for lawmakers wishing to enact a meaningful overhaul of the tax code in the coming years." It gives plain language summaries of many of the breaks that will come under discussion in tax reform. Many members, including outgoing Ways & Means Chairman Dave Camp (R-MI) and former Senate Finance Chairman Max Baucus (D-MT), started the work of reforming the tax code over the last several years. Hopefully, this report will inform the public and the lawmakers who will continue those discussions in the next Congress.

We've often highlighted how the current tax code is overly complicated, and full of over $1 trillion of annual tax expenditures that are often regressive, economically distorting, or inefficient. In order to tackle tax reform which simplifies the current system, lawmakers will need to take a hard look at each of these provisions, deciding which are worth keeping. Because, as the report explains,

Without addressing each special preference, or rethinking some of the code’s most distortionary provisions, Congress will be unable to generate the revenue needed to lower rates, simplify, improve, and clean up the tax code.

Over the years, Coburn has published many reports highlighting waste, fraud, and low-priority spending, including five annual editions of the Wastebook. With the Debt Doctor retiring at the end of the Congress, this is the last report we can expect from his office to highlight these cases of misallocated government resources. Coburn's voice for fiscal responsibility will be missed.

Read the full report from Dr. Coburn's office here.

See our tax reform resource page for more information about tax reform.