Investopedia says that the One Big Beautiful Bill Act (OBBBA) has opened a tax loophole that billionaires and other wealthy people are expected to take full advantage of.
The bill changes tax laws that have to do with something called bonus depreciation. The rate of tax deductions under this bill had been slowly going down to zero, but the OBBBA has set the rate at 100% and made that change permanent. U.S. Bank reports that it also raised the total amount of tax deductions one person or family can get each year.
This means that, if a person buys an asset for $100,000 and that money is in a 30% tax bracket, they save $30,000 on their taxes. This holds true even if they only put $10,000 down on the purchase and financed the rest. The change applies to a wide variety of assets, which could include everything from racehorses to yachts to heavy machinery. First Citizens Wealth reports that it could include real estate, too.
The only sticky thing here is that the asset has to be used for business purposes at least 50% of the time. Mark Stancato, a tax expert from VIP Wealth Advisors, told Investopedia that this is something to take seriously.
"If you're buying a jet or yacht purely for lifestyle, don't expect the write-off to survive scrutiny," he said. "The IRS has already targeted business aircraft and high-dollar hobby activities, and it will continue to tighten its focus on these areas."
Still, this is just one more way that America's wealthiest people could avoid paying the taxes they legitimately owe, and that would help improve the country, including improving life for its most vulnerable people. This is one more tax break that will serve the richest people the best, added to a long line of legislation that serves them rather than the rest of the country or the environment.
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Want to make changes? The best thing average citizens can do right now is to vote for politicians who care about the climate. They are the ones who can change these laws so that everyone pays their fair share, regardless of how much income they have.
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