A tax provision in the coronavirus relief package will mostly benefit millionaires, nonpartisan report finds

Sen. Sheldon Whitehouse (D-R.I.) on Tuesday accused Republicans of looting the American people during the COVID-19 coronavirus pandemic, The Washington Post reports. That's because a new report from the Joint Committee on Taxation, a nonpartisan congressional body, found that a tax provision included in the congressional coronavirus relief package by GOP senators will overwhelmingly benefit people making over $1 million per year while costing taxpayers $90 billion in 2020 alone.

The provision that has Whitehouse and others up in arms is the suspension of a limitation on how much owners of "pass-through" businesses (that is, businesses whose profits are subject to the owners' individual income tax rather corporate income taxes) can deduct against their non-business income, such as capital gains. The limitation was initially included in the 2017 Republican tax law, capping deductions at $250,000 in losses, but advocates on the right called it a mistake.

Now that the limit has been suspended, the Post reports, wealthy Americans — largely hedge-fund investors and real estate business owners — can use their losses to reduce tax burdens. The JCT study found that 82 percent of the benefits will go to about 43,000 taxpayers who earn more than $1 million, while people who make less than $100,000 will receive just 3 percent of the benefits. While there's been criticism from the left, Alan Viard of the American Enterprise Institute argues the tax relief is important because it "gives businesses badly needed liquidity" during the pandemic. Read more at The Washington Post.

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