San Antonio Express-News Editorial: In staggering time of need, tax break for rich appalling
As millions of Americans have lost jobs, stood in long lines for food and desperately needed federal relief to pay bills, thousands of other wealthy Americans stand to gain from a massive tax break.
That’s the short version of a provision Senate Republicans inserted into the CARES Act, a $2.2 trillion coronavirus relief package passed in March.
The CARES Act included $1,200 checks for millions of Americans, boosted unemployment and kick-started the important, but flawed, Paycheck Protection Program. But it also included a generous tax break for the wealthy by temporarily suspending limits for how much owners of pass-through businesses could deduct on-paper losses against other forms of income like capital gains.
In response, U.S. Rep. Lloyd Doggett, D-San Antonio, and U.S. Sen. Sheldon Whitehouse, D-Rhode Island, requested an analysis from the Joint Committee on Taxation, a nonpartisan congressional body.
That analysis found the change will “cost” taxpayers about $90 billion in 2020 alone. Most of the benefit — about 82 percent — will go to 43,000 taxpayers earning more than $1 million.
It’s a move, experts have said, that primarily benefits hedge fund investors and real estate businesses.
While it’s been argued that this change will help businesses keep the lights on and people employed, we are not so convinced. As the New York Times recently reported about this tax break, and others, the real estate industry “is well known for generating tax losses from depreciation even in profitable years.”
And we can’t help but wonder just how $90 billion could have been used to further assist struggling Americans or support infrastructure or education needs. The jobless rate is now 14.7 percent, a staggering toll.
In response, Doggett and Whitehouse have filed legislation to roll back this provision and other disproportionate tax benefits.
“At a time when there are so many people in need, to take advantage of that situation to help a slice at the top is pretty appalling,” Doggett told us.
We support the effort to repeal this giveaway, even if it is likely quixotic. What’s particularly sad and disappointing about this change is that it’s not at all surprising.