Washington, D.C. — This week, House Republicans released radical and partisan new budget and tax proposals that would gut programs that help Americans afford their basic needs while disproportionately giving massive tax cuts to the ultrawealthy. A new Center for American Progress column breaks down some of the new tax loopholes for the wealthiest Americans, including:
- Increasing the estate tax exemption, which benefits just the top 0.1 percent of taxpayers. The new House Republican plan calls for not just extending the enlarged estate tax exemption from the Tax Cuts and Jobs Act (TCJA)—a massive windfall for the heirs of supremely large estates—but also increasing the exemption even further, up to $15 million for individuals and $30 million for couples in 2026. This exemption expansion will result in millionaire heirs receiving tens of thousands of dollars in additional tax breaks.
- Increasing the pass-through deduction from 20 percent to 23 percent and making it easier for wealthy Americans to claim it. The TCJA created a new tax loophole for owners of pass-through businesses—partnerships, sole proprietors, and S corporations—to deduct 20 percent of their qualified business income (QBI) when calculating their taxes, effectively lowering the top tax rate and saving some of the wealthiest taxpayers tens of thousands of dollars per year. The new House Republican plan would extend and enlarge this wasteful loophole, giving an even bigger tax break to the wealthy taxpayers who are the majority of filers taking advantage of this loophole.
- Allowing wealthy investors to avoid paying capital gains taxes for subsidizing private school vouchers. Under the House Republican tax proposal, taxpayers are eligible to claim a tax credit of up to 10 percent of their annual gross income or a maximum of $5,000 by making charitable contributions to scholarship-granting schools, including private schools, that meet certain rules. This scheme allows taxpayers to make contributions to schools, including through marketable securities, allowing them to realize capital gains without having to pay tax on them.
“House Republicans’ budget and tax plans would give even more wasteful tax breaks to the wealthiest Americans at the expense of 14 million more people being forced to live without health coverage,” said Colin Seeberger, senior adviser for communications and author of the column. “If this tax proposal is implemented, the wealthy get wealthier, while working-class Americans are left struggling to make ends meet.”
Read the column: “House Republicans’ Tax Bill Is Full of New Loopholes for the Ultrawealthy” by Colin Seeberger
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