An estimated $500 billion — "more than enough to balance the federal budget," according to Sen. Tom Coburn — are lost annually because the U.S. tax code is so complicated and unwieldy.
“You can’t find two tax accountants that will give you the same tax return on your taxes,” Coburn said. “The best thing you can do is sunset this tax code.”
Coburn's comment Tuesday came as he released a report titled "Tax Decoder" that detailed more than $900 billion in loopholes in the federal tax code. It also identified $5 trillion of tax expenditures over the next five years.
Additionally, the Internal Revenue Service spent more than $10 billion to enforce tax collection, according to Coburn’s report.
The report outlined the tax code's complexity, highlighting its span of 9,000 pages in 2012 and its more than 4,600 changes from 2001 to 2012.
Taxpayers spend $10 billion in tax preparation services each year. In 2010, 89 percent of filers used either preparers or software to complete their taxes, according to the report.
Of the 4.8 million tax filers that earned $200,000 or more, 15,000 paid no taxes to any national government in 2011. More than 1,600 filers that earned at least $1 million paid no income taxes, according to Coburn’s report.
“Everybody should participate,” Coburn said. “Let’s make it fair for everybody.”
Hollywood filmmakers, gambling losses at casinos and sports teams’ owners writing off the depreciating value of their players are examples of how some of the tax expenditures are used.
"Look at all the things they don't look at," Coburn said.
Yankee Stadium, the second-most expensive baseball stadium ever built, received $942 million in tax-free financing. The $1.2 billion stadium for the Dallas Cowboys was financed by government bonds, according to Tax Decoder.
Many tax-free universities received the same benefits for their sports stadiums.
The report also identified tax-free, nonprofit charities that benefited from loopholes.
For example, Lady Gaga’s nonprofit, the Born This Way Foundation, raised $2.6 million, but donated only $5,000 in 2012. Kanye West’s charity went without a single monetary donation in 2010, according to the report.
Likewise, the Cancer Fund of America donated $890,000 to cancer patients, but gave $5 million to the founder’s family and spent $80 million on fundraisers over a 10-year period.
Despite facing the world’s highest corporate tax rate, companies also benefited from tax breaks.
For example, from 2008 to 2012, 111 Fortune 500 companies paid either no taxes or received a refund, the report read.
Additionally, corporations kept $2.1 trillion overseas. General Electric, for example, banked $110 billion abroad.
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