Nearly 82% percent of GOP tax benefits buried in COVID-19 relief act to go directly to the ultra rich: Report
While the Donald Trump administration is eager to rush relief money to common Americans when the coronavirus pandemic has left the economy battered, a non-partisan Congressional body reported on Tuesday, April 14, that nearly 82 percent of a Republican tax provision hidden in the COVID-19 relief fund will go directly to the country’s millionaires and billionaires.
The provision will cost taxpayers an estimated $90 billion this year alone and has seen a backlash from Democratic lawmakers and progressive critics.
The finding comes in a new Joint Committee on Taxation (JCT) analysis released by Democratic Senator Sheldon Whitehouse and Representative Lloyd Doggett, reported the Washington Post.
The JCT report, dated April 9, detailed the expected impact of the GOP provision, which is part of a $2 trillion-plus economic stimulus package signed by Trump in March.
The clause benefiting the wealthy was entered into the Coronavirus Aid, Relief and Economic Security (CARES) Act by the Senate Republicans and it "temporarily suspends a limitation on how much owners of businesses formed as 'pass-through' entities can deduct against their nonbusiness income, such as capital gains, to reduce their tax liability," explained the report.
The suspension of the limitation is also a part of a series of tax amendments that are expected to add nearly $170 billion to the national deficit in another decade's time.
The JCT analysis said just three percent of the benefits will go to American people earning less than $100,000 a year. On the other hand, 82 percent of the benefits will go to those who earn $1 million or more each year.
"This analysis shows that while Democrats fought for unemployment insurance and small business relief, a top priority of President Trump and his allies in Congress was another massive tax cut for the wealthy," Whitehouse, who prompted a probe after the report was published, said in a statement.
'Rotten, un-American giveaway'
"Congress should repeal this rotten, un-American giveaway and use the revenue to help workers battling through this crisis," he added. The Rhode Island senator even went to the extent of calling it a "scandal for Republicans to loot American taxpayers in the midst of an economic and human tragedy."
The JCT's report also focused on the impact of another tax change in the CARES Act that allows the firms to write off 100 percent of their losses, instead of 80 percent that a 2017 Republican tax law had earlier allowed.
The JCT analysis came after Whitehouse and Doggett wrote to Trump administration officials seeking information to explain the origins of the GOP provisions to the relief package.
It also came following a New York Times report that the president himself, along with his son-in-law and senior advisor Jared Kushner and real-estate investors in Trump’s "inner circle" could benefit from the relief law's tax giveaways.
"Someone wrongly seized on this health emergency to reward ultrarich beneficiaries, likely including the Trump family, with a tax loophole not available to middle-class families," Texas Representative Doggett said. "This net operating loss loophole is a loser that should be repealed."
California Democratic Representative Barbara Lee also lashed out at the GOP saying they were giving tax breaks and corporate giveaways to wealthy friends instead of giving relief to Americans who are struggling to survive another day.