The giveaway, primarily to real estate investors and hedge funds, is larger than the total amount in the legislation for hospitals ($100 billion) and for relief for all state and local governments ($150 billion). Worse, the bonanza for these millionaires and billionaires has little to do with the coronavirus: It lets them offset losses not just from 2020 but from 2018 and 2019, before the pandemic.
This is repugnant. Cash-strapped states don’t have the funds to care for the sick, much less to do the testing, contact tracing and isolation needed to reopen workplaces and schools. As The Post’s Tony Romm reported Tuesday, more than 2,100 U.S. cities expect major budget shortfalls — and therefore possible cuts to vital public services.
But this provision gives tax filers who earn more than $1 million a year an average windfall of $1.6 million this year alone. (Compare that with the $1,200 break the average wage earner gets.) As The Post’s Jeff Stein reported Tuesday, the Joint Committee on Taxation found that 82 percent of the benefit of this and another tax giveaway in the coronavirus relief bill will go to the 43,000 taxpayers who earn more than $1 million — and just 3 percent to those who earn less than $100,000.
Of course, we don’t know for sure how Trump could benefit. As you may have heard, he won’t release his tax returns. But we know that the Trump Organization includes hundreds of “pass-through” entities, the type of corporate structure that benefits from the new tax break. We also know that Kushner and his wife, Ivanka Trump, have been involved in hundreds of such entities. The windfall is particularly of use to pass-through businesses that lost money in 2018 and 2019 — when the economy was booming but many Trump properties had declining revenue because of Trump’s radioactivity.
The president has used his official position to benefit his businesses before, sending large amounts of federal government business to his properties in Florida, D.C., New York, New Jersey, Ireland and Britain, and even proposing to host the leaders of the Group ofSeven countries at his Doral resort. At least one of his properties appeared to have advance knowledge of his initial plans to reopen the economy by Easter.
Democrats insisted on a provision in the legislation to stop Trump and his family from being awarded money from a coronavirus relief fund that the administration hands out with little oversight. But the president is free to benefit from the tax break in the package, negotiated by Treasury Secretary Steve Mnuchin with congressional leaders, for pass-throughs (which are taxed via the individual income of their owners rather than in the form of corporate income taxes).
Real estate developers, a major component of pass-through businesses, received $67 billion in tax breaks in the 2017 Trump tax cuts, partially offset by new limits on the losses that could be deducted. The new law gets rid of the limits — a conservative goal for the past few years.
Democrats said they were aware of the provision, which first appeared in a draft of the bill by Sen. Chuck Grassley (R-Iowa), the chairman of the Finance Committee, but they weren’t aware of the huge price tag until too late in the process to do anything about it. The Joint Committee on Taxation’s estimate of the cost came out a day after the Senate unanimously passed the bill.
Joe Biden, the presumptive Democratic presidential nominee, has called for repealing the tax break to fund student-debt relief. Sen. Sheldon Whitehouse (D-R.I.) and Rep. Lloyd Doggett (D-Tex.), who sent a letter to the White House to determine whether officials “who stand to gain from these provisions were involved in their development,” propose repealing the break and shifting the funds to “workers battling through this crisis.”
Now, with Congress trying to function by unanimous consent to avoid gathering in the Capitol, there’s probably not much chance of forcing a repeal vote for a while. But every voter should know that, at a time when hospitals, cities and states cried out for help with the pandemic, the president’s allies in Congress tossed a $170 billion lifeline in the direction of Trump, Kushner and other rich people who needed it the least.
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