Wednesday, December 10, 2014

US Senator: Wealthy musicians, athletes, clergy exploit tax loopholes to drive up rates for rest of us

What do Kanye West, Lady Gaga,  Hollywood superstars, and mega-paid athletes have in common with clergy?

They are all targets of retiring Oklahoma Senator Tom Coburn's report on special tax breaks. There is a group of several hundred such breaks set to be extended by congress. While the housing allowance we clergy receive does not need any legislation to be extended, it's locked in brethren, it is of the type Coburn assails as being a special giveaway that clutter our mammoth tax code and that should be eliminated or adjusted.

Ah, the company we clergy are keeping these days. Who would have thunk it?

Look for us to be found among such company under headlines such as,

"The Worst Tax Loopholes in America, revealed"

"Greatest Hits Collection of Tax Breaks"

Specifically and pointedly included in the special giveaways for business, wealthy sports owners, Hollywood superstars, mega-compensated athletes and rock stars is, you guessed it, our beloved...

"...parsonage housing allowance," which he [Coburn] said enabled clergy to build million-dollar homes for themselves while double dipping on tax breaks, collecting housing stipends as tax-free income and then getting the extra parsonage break.

There's absolutely no argument that the statement above is accurate. Some clergy do build or buy million-dollar homes for themselves and are able to exclude hundreds of thousands in income from any income tax. There's no question it is a fabulous special giveaway for the men and women of the cloth, both millionaires in mansions and humble plodders in hovels.

Even though the big loophole money is not in our housing allowance, if clergy are receiving attention on this and are being grouped with Lady Gaga and Kanye West maybe it's time we at least spoke up against the abuses of it.

Here are things that ought to bother all of us about the current system and our involvement in it:

1. There's no cap on the allowance. This is what Coburn focuses on. Why should a fabulously compensated minister living in a Gatsbyesque mansion be rewarded with tax free income? Why, indeed. Is he a jobs creator plowing back capital into a business that expands employment and production or just a garish consumer? Should our tax code reward consumption in this manner or encourage productive economic activity? Let the brother or sister spend all they choose in whatever manner they wish - but pay the stinkin' tax on it. Don't saddle the rest of us with the resultant tax losses to make up.

2. Like it or not, fair or not, we are all being grouped with people and classes of consumers that most of us find offensive. What about "seek first the kingdom of God"? What about "blessed are the poor"?

3. Not one Southern Baptist leader - not Frank Page, not Russell Moore, not any SBC president has a syllable of objection on record to the housing allowance exclusion as presently codified. If you can find some, please let me know. There is no defense of some uses of the allowance. Why the silence from those who ought to object? Self-interest? Concern about drawing attention to it? Some lame, convoluted church-state concern?

4. What bothers me personally is that, invariably, when the matter is discussed I find hard-working, meagerly-paid, obscure and humble SBC clergy spending energy defending their colleagues who are in the millionaire mansion crowd and assailing any, like me, who dare criticize our Sacred Clergy Tax Break. Why? Are we lovable dupes?

Makes no sense, brethren, but maybe you've figured out a way to explain all this to the family in your church who struggles to pay for their humble abode while you and your colleagues get tax excluded income to live in better housing. Maybe if you explained how you and Kanye West are brothers-in-tax-giveaways it will help the explanation. Maybe not.

Maybe I ought to take in a Lady Gaga concert, since we are in league with her. Probably couldn't afford the ticket.

Wealthy musicians, athletes exploit tax loopholes to drive up rates for rest of us


RLBaty said...

I was a little slow in realising Coburn, on his way out, took a swipe at IRC 107.

Too bad he's not going to be around to actually do anything about it.

I have some criticism of his report, but it is something and he reaches the right conclusion; IRC 107 should go.

Did you notice how he selectively named names?

Can you guess who he was talking about (protecting) in this note:

"A prominent California church designated the whole salary of its senior pastor (Rick Warren -RLBaty) as a housing allowance, prompting an investigation from the IRS. In the midst of that lawsuit, Congress limited the allowance to the fair rental value of the home plus certain expenses – the only time Congress has modified the tax break."

Where was Coburn when it was time to support the FFRF litigation that would have done what he is recommending?

AWOL - Playing Politics!

Ed T. said...

Nice "rant", William. That's the problem with the U.S. tax code. It's written in such a way that all this give-away idiocy is out there. Simple flat tax or strictly limited deductions should be implemented, but I'm afraid it would take a gargantuan effort to to it. There's untold numbers of accountants/CPAs and lawyers with a whole lotta money to throw around (bribe) to make sure their professions are protected from extinctions.

Gee, simplifying the tax code would probably even wipe out TurboTax and other software's a real mess all around.

I do recall with amusement the article the Dallas Morning News did a few years ago on one pastor in the area and his "10,000 square foot" house on a number of acres. His response was to take issue with the claim of a "10,000 square foot house". It was just 7,000. Sigh.

RLBaty said...

My feeble attempt to address Senator Coburn's report and my hobby on the issue.