Image via Shutterstock
Image via Shutterstock

Democrats, including former vice president and presumptive Democratic presidential nominee Joe Biden, have criticized the change.

Senate Republicans slipped a tax provision into the coronavirus relief bill that almost exclusively benefits people who earn more than $1 million a year, the Washington Post reported Tuesday.

Republicans specifically inserted a suspension of a provision from the GOP’s 2017 tax law that limits the amount of losses certain business owners can deduct on their tax returns, the Post noted. Suspending that provision overwhelmingly benefits hedge-fund investors and real estate businesses.

The Post’s report relies on a soon-to-be-released study from the congressional nonpartisan Joint Committee on Taxation.

That study found that suspending the tax provision will put $70 billion back into the hands of 43,000 taxpayers who make at least $1 million a year.

Democrats, including former vice president and presumptive Democratic presidential nominee Joe Biden, have criticized the change.

“That tax cut overwhelmingly benefits the richest Americans and is unnecessary for addressing the current COVID-19 economic relief efforts,” Biden wrote in a Medium post on April 9.

A spokesperson for Senate Finance Chair Chuck Grassley (R-IA) said this week that the tax provision “helps businesses keep the lights on and employees on payroll as much as possible to get through this crisis.”

“Every senator criticizing this provision voted for this bipartisan bill, so their complaints about a law they helped write simply stink of partisan politics,” the spokesperson said.

Senate Republicans notably added the provision as they were trying simultaneously to lower the amount of unemployment insurance for the poorest workers in the country.

Sen. Ben Sasse of Nebraska along with Sens. Lindsey Graham and Tim Scott of South Carolina said the generous unemployment benefits would incentivize people — specifically nurses — not to work.

“I think we’ve done absolutely the worst thing we can do to stabilize the economy. We’ve incentivized people not to go back to work,” Graham said at the time. “Every employer in the state has to compete with a $24 an hour minimum wage now I guess.”

Graham did not address the fact that workers are unable to collect unemployment insurance if they quit their jobs voluntarily.

The decision to give more tax breaks to wealthy Americans follows on the heels of the GOP tax bill, which passed two and a half years ago and was a boon to corporations and the super wealthy. Republicans had promised the bill would serve the middle class and American worker, but despite an initial wave a onetime bonuses for some, the vast majority saw little change in their annual taxes.

“These massive tax cuts will be rocket fuel,” Donald Trump claimed at the time, prior to the bill’s passage. “Rocket fuel for the American economy.”

The cuts are instead expected to add a whopping $2 trillion to the deficit over a span of 10 years according to the nonpartisan Congressional Budget Office. And the nation’s biggest banks have also pocketed an additional $32 billion in savings since the bill passed — all while cutting thousands of jobs simultaneously.

Published with permission of The American Independent Foundation.