To understand the cynicism and mendacity underlying the Republican tax bill, look no further than a provision that would benefit President Trump and other property tycoons that is in the final legislation Congress is expected to vote on this week.
The provision would allow people who make money from real estate to take a 20 percent deduction on income they earn through limited liability companies, partnerships and other so-called pass-through entities that do not pay the corporate tax. The beneficiaries would also include members of Congress like Senator Bob Corker, who last week decided he would vote for the bill even though Republican leaders did nothing to address his concerns about an exploding federal deficit.
The biggest winners would be people like Mr. Trump, his family and similarly advantaged developers who make tens or hundreds of millions of dollars every year on swanky office towers and luxurious apartment buildings. An earlier version of the bill passed by the Senate provided a 23 percent deduction but put limits on its use that would prevent wealthy developers from profiting from it. The House version would simply have reduced the rate at which pass-through income is taxed.
Republican leaders and Mr. Corker, who owns a real estate partnership in Tennessee, say the new loophole was not put in place to win over his vote. Mr. Corker has become more important because his party can afford to lose only two votes, and Senator John McCain will be absent because of the aftereffects from his cancer treatment.
Republicans insist, further, that the provision was not “airdropped” — Mr. Corker’s term — into the tax bill during conference committee negotiations, and that its main purpose was to make sure pass-through businesses were not treated unfairly because corporations would be getting a big tax cut to 21 percent, from 35 percent now. Whatever the Republicans’ protestations, this malodorous loophole is further confirmation that congressional leaders are doing everything they can to maximize benefits for the wealthy at the expense of almost everybody else.
As for Mr. Trump, he has been going around saying the tax bill would “cost me a fortune” and his accountants “are going crazy now.” This claim has always been “fake news.” But with the new loophole it has become even more nonsensical. Having done nothing to drain the Washington swamp, the president now luxuriates in its warm waters.