A component of President Donald Trump's "Big Beautiful Bill" gives a huge tax break to the uber-rich. This tax policy will benefit ultrawealthy Americans who purchase a private jet, Forbes reported.
"For someone interested in buying a jet, whether new or used, this is a very big deal," said Matthew Bere, managing director of aviation at BOK Financial, an Oklahoma-based bank. He believes this will substantially increase activity in aircraft sales.
This portion of the bill was considered to be buried in the legislation. The Senate voted to restore a 100% "bonus depreciation" under federal law, meaning a business can write off the full amount of an item in the year it is purchased.
The policy was part of the 2017 Tax Cuts and Jobs Act but was scaled back in 2023 and was scheduled to expire in 2027, according to Thomson Reuters, per the report.
The bonus depreciation policy applies to many qualified expenses but is often closely associated with very expensive luxury items. When it was first passed in 2017, jet sales spiked.
The article explained that this is unusual because in standard business accounting procedures, capital investments are spread over time –– multiple years — and are never completely written off. This new policy allows these large purchases to be written off in the first year.
This is a huge incentive for extremely wealthy people and companies to purchase more private jets, according to Forbes.
Private jets create a lot of harmful pollution that is contributing to the warming of the planet — and the ratio of pollution to passengers is grossly high compared to a standard commercial flight carrying dozens or hundreds of passengers.
A private jet typically carries only a few at a time. The high-pollution, low-passenger transport has been said to be the opposite of carpooling. Because of this, some countries have attached a luxury tax to private jet purchases.
The Congressional Budget Office has estimated that the permanent establishment of the 100% bonus depreciation would cost taxpayers $378 billion over 10 years, according to Forbes.
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Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies think tank, is critical of the policy that seems to have flown under the radar for many. In the Forbes report, he called it an "example of oligarch-friendly rules" and a "massive tax break for billionaires and centi-millionaires."
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