Republican Megabill Includes Special Tax Breaks for Venture Capitalists, Alaskan Fisheries, and More

Special tax breaks for venture capitalists, Alaskan fisheries, spaceports, private schools, rum makers, and others—costing tens of billions of dollars—have been included in the Republicans’ expansive domestic policy megabill. The primary aim of this legislation is to prevent $4 trillion in impending tax increases scheduled for the end of this year. However, Senate Republicans added a series of unrelated, tailored tax breaks just before approving the plan, with House GOP lawmakers also contributing their share.

Many of these tax breaks are narrowly targeted, similar to those Republicans have historically criticized as unfair, benefiting special interests and complicating the tax code. Notable provisions include a supersized deduction for business meals, limited to employees at certain Alaskan fishing boats and processing plants north of 50 degrees north latitude but not in metropolitan areas. There is also a $17 billion expansion of a provision allowing venture capitalists to earn tax-free profits.

Sen. James Lankford (R-Okla.) secured a carve-out for the oil and gas industry from a minimum tax on large corporations introduced during the Biden administration. A $2 billion break benefits the rum industry, particularly in Louisiana, according to Sen. Bill Cassidy (R-La.). These targeted tax breaks are overshadowed by the bill’s main goal: preventing tax cuts from expiring and enacting breaks for tips and overtime pay promised by President Donald Trump.

Despite some provisions appearing suddenly with little public scrutiny, they received fast-track approval. House Republicans, including the hard-right Freedom Caucus, criticized the bill for being “loaded with pork to buy key Senate votes.” However, the House approved it 218-214, sending it to Trump for his signature.

Senate Republicans added their provisions while deleting some House-approved earmarks. The bill includes an expansion of a break used by Silicon Valley investors to avoid taxes on earnings from internet startups and a $26 billion credit for donations to private school scholarship groups. Sen. Mitch McConnell (R-Ky.) secured a $7 billion tax cut for farmers, allowing them to defer capital gains taxes on farmland sales. A $1 billion provision allows spaceports to sell tax-exempt bonds.

Democrats unsuccessfully attempted to kill some proposals. Sen. Mazie Hirono (D-Hawaii) saw her amendment targeting the private-school tax break fail on a 50-50 vote. Sen. Ted Cruz (R-Texas) accused Democrats of being more loyal to teacher union bosses than to fighting for kids.

Senate Republicans removed some House-approved earmarks, such as an $800 million tax cut for Virgin Islands corporations and a $10 billion provision for the fitness industry. However, they reinserted a $3 billion tax break for real estate investment trusts and exempted gun silencers from a $200 tax on firearms, costing $1.7 billion.

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