Is this really a problem?
Based on my test on same conditions in 1.1.6. I have 0 total after coupon is applied
Reason for this, your discount amount is higher than product price. Tax is only calculated based on subtotal amount AFTER all discounts and before shipping (unless it is set to apply tax on shipping).
In other words, if you reduce amount of your product price, tax is applied only on the remainder portion of the product price. In your case, price of product is 0, so there is no tax.