Tuesday, March 15, 2011

Entitlements for the rich

Usually when you hear about “entitlements”, it’s politicians talking about programs primarily for the elderly, individuals with disabilities, and those living in poverty. But the federal budget also includes certain entitlements called tax breaks that are buried in the tax code but that reflect other priorities. These allow individuals or companies to earn money back for certain types of activities that are intended to have benefits for everyone. Examples include the child tax credit, earned income tax credit or the mortgage deduction on your own home. As good as these common ones are, there are a whole slew of tax breaks only available to …

The rich.

And corporations.
Now, as Washington is considering multiple cuts for important community supports they’ve “forgotten” to check back on the tax break side. Something unknown to most Americans is that when lawmakers start looking where to slash program budgets they do not generally review all of the tax breaks. No doubt, a difficult task. In fact, tax breaks continue without lawmakers even being aware of their costs when voting on these budgets. Imagine ignoring $500 in bank account and taking out a high interest loan instead.

Here are a few examples of costs on both sides of the ledger:
  • families who purchase a vacation home in 2011 will reap $800 million by avoiding taxes through mortgage interest deduction, while the House Budget includes a $730 million cut for housing programs for the elderly and disabled
  • oil companies get more than $2 billion in tax write-offs for drilling expenses, yet Congress is considering cutting the Low Income Home Energy Assistance Program (HEAP) that provides just $2.5 billion nationwide to families who really need it to survive.
Write your Congressman and ask that tax breaks be “scored” so members of Congress know their cost as part of the annual process to pass a budget. Don’t allow the “gutting” of safety net supports when billions in unnecessary tax entitlements can be cut to preserve socially responsible expenditures. Click here to go right to Richard Hanna’s website.

- Dave L.