An Unauthorized, Half-Trillion Dollar Entitlement

[Locutus]

Last week, two congressional committees issued a little-noticed report detailing how Treasury Department, Internal Revenue Service, and Health and Human Services officials conspired to create a massive new entitlement not authorized anywhere in federal law.

In the summer of 2012, the House of Representatives’ Committee on Oversight & Government Reform and Committee on Ways & Means launched an investigation to determine “whether IRS and Treasury conducted an adequate review of the statute and legislative history prior to coming to [the] conclusion that [the Patient Protection and Affordable Care Act's] premium subsidies would be allowed in federal exchanges.” Over the next 18 months, the committees held numerous hearings with senior Treasury and IRS officials, while investigative staff conducted interviews with key agency attorneys responsible for developing the regulations in question. Investigators also reviewed what few documents Treasury and IRS officials allowed them to see.

Here is what seven key Treasury and IRS officials told investigators.

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Congressional Investigation: Treasury, IRS, HHS Conspired To Create An Unauthorized, Half-Trillion Dollar Entitlement - Forbes

 

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How Entitlements for the Rich Cheat the Rest of Us








Subsidies: Alms for the Rich

About two-thirds of nearly $1 trillion in individual "tax expenditures" (deductions, exemptions, exclusions, credits, capital gains, and loopholes) goes to the top quintile of taxpayers.

At the corporate level, tens of billions of dollars go in subsidies to the fossil fuel, fishing, and agricultural industries. Fossil fuel subsidies may be much, much more. The IMF reports U.S. fossil fuel subsidies of $502 billion, and according to Grist, even this is an underestimate.






Mocking Our 'Progressive' Tax System





Americans who earn millions of dollars a year feel entitled to the same maximum tax rate as those making about $400,000 a year. Progressive taxation stops at that point. In fact, it reverses itself, with the highest earners paying lower tax rates. The richest 10% pay about 20 percent in federal taxes, and it goes down from there, with the richest 400 paying less than 20 percent. When all taxes are included (payroll, sales, state and local), the super-rich pay about the same percentage as America's middle and upper-middle classes.

Corporations feel entitled to lower taxes, too, having cut their income tax rate in half in just ten years. The companies that have benefited the most from public research have become skilled tax avoiders.

Some corporate CEOs feel entitled to total freedom from taxes, employing a noble-sounding strategy of a $1 per year salary to avoid federal income taxes. It allows them to defer all capital gains taxes on their stock holdings, which can be used, if cash is needed, as collateral for low-interest loans.





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How Entitlements for the Rich Cheat the Rest of Us | Common Dreams