The Trump administration's reinstatement of a tax break for the ultrawealthy has created a hidden market in which such families can compound their riches at the expense of most of the country.
The One Big Beautiful Bill Act made private jets and other business purchases 100% deductible, as Bloomberg explained.
"It's designed to spur investment by allowing companies to deduct the cost of anything that wears out over time — such as equipment, vehicles or machinery — all at once rather than over several years," the outlet stated, noting the uber-rich and tax experts use it to reduce what is owed to the government.
Over the next decade, this bonus depreciation incentive will cost the IRS $363 billion in lost revenue. It also promises to create a glut of unnecessary investments instead of needed ones, such as car washes instead of housing, Bloomberg reported.
One person planned to buy a jet just to charter it and reap the tax benefits. Others are sinking money into gas stations, a maneuver that began in 2017 when certain assets qualified for a similar 100% write-off. But that legislation dropped 20 percentage points annually starting in 2023. This one is permanent.
Real estate investments are also up. Heidi Henderson of Engineered Tax Services told Bloomberg the movement after Congress approved the bill was "almost instantaneous."
"We are seeing a huge uptick," she said. "We are getting so many calls from people asking, 'What should we buy, how can we take the most advantage?'"
"It's a big game," said Mark Johnson, who owns a family business. He has bought a bunch of car washes in two states and is considering acquiring more. His accountant will "make sure the IRS doesn't see any of those millions of dollars for the rest of his life," per Bloomberg.
"It works while I'm alive and, at my death, the estate's going to have to pay tax, but my heirs will have a pretty nice bunch of assets," he said. "Then the whole thing starts over again."
At a time when Supplemental Nutrition Assistance Program benefits — which help low-income families grow their grocery budgets to buy healthy food — are being held up for tens of millions of Americans, this is especially alarming. (The One Big Beautiful Bill Act had already cut SNAP assistance to four million people.)
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The government 🏛️ Studies show that extremely wealthy individuals are disproportionately responsible for the changing climate — in part because of their investments. Billionaires, in particular, are a problem, as Oxfam detailed. In 2019, Earth's richest 1% produced more pollution than five billion people. This decade, they will be responsible for 1.3 million heat-related deaths.
It's a negative feedback loop, too, as rising temperatures have worsened global economic inequality. Absent awareness and policy decisions that force the capable few to make changes, the issue will continue to spiral.
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