Republicans billed their tax overhaul as a way to clear out special loopholes from the bloated tax code — but the bill that will hit the Senate floor after Thanksgiving actually adds a host of new breaks on everything from private jet operators to citrus farmers.
The jet plan, which would exempt private airplane maintenance payments from a transportation excise tax, has quickly become emblematic of the GOP’s bill in online forums, with opponents saying it shows the plan is skewed toward the wealthy who can afford to use such planes.
The aviation industry says that’s a misunderstanding, and said the provision is intended to make sure private plane managers don’t pay a 7.5 percent “ticket tax” applied to commercial flights.
“Tax reform legislation has a long way to go, but this is an important step and small aviation businesses are appreciative of the inclusion of this provision, which provides them the tax certainty they have long sought,” said Martin H. Hiller, president of the National Air Transportation Association.
Democrats, though, said taking care of private jet users had little to do with the middle class that the GOP said was the focus of the bill.
“Seriously. How many middle-class families have even flown on a private jet, let alone own one?” the Democratic National Committee said in a memo blasting the GOP plan.
Also under fire from Democrats were breaks for golf course owners and wine producers.
The estimated price tag for the airplane break — less than $50 million per year — is a pittance in a tax cut package that’s nearing $1.5 trillion in cost. But it’s still emblematic of just how difficult completely scrubbing the code of such special carve-outs can be, as Republicans try to give the code its first major rewrite in 30 years.
“There are always some structural factors that lean toward turning a major piece of legislation into a Christmas tree,” said Scott Greenberg, an analyst at the Tax Foundation.
“This is driven by the underlying dynamic that Congress doesn’t really pass very much, so whenever there’s a bill that seems more likely than others to be passed, everyone scrambles to include their preferred provision,” he said.
That could be why there’s a seemingly obscure tax deduction included in the Senate plan for citrus plants that are lost or damaged.
Though hyper-specific, the item is in line with one of Republicans’ broader goals in the tax reform push — to allow businesses to expense more of their capital costs — and could have key allies in states like Georgia and Florida, Mr. Greenberg said.
“When I saw the citrus expensing provision, I thought to myself, ‘Oh, this is the Rubio-Nelson bill,’” Mr. Greenberg said, referring to Florida Sens. Marco Rubio and Bill Nelson.
There are also various alcohol-related breaks in Finance Chairman Orrin G. Hatch’s revised plan that would reduce excise taxes on certain beer, wine and spirit producers.
The Senate plan changes a current rule that taxes beer transports between breweries that have different owners. Under the new proposal, transporting the beer between breweries with different owners could be tax-free if certain conditions are met.
It also repeals deductions associated with settlements and payouts tied to sexual harassment or abuse if the payments are subject to a nondisclosure agreement.
That item has particular relevance in the wake of a growing number of women who have accused politicians and celebrities of harassment or sexual misconduct in recent months.
Rep. Ken Buck, a Colorado Republican who introduced a similar amendment to the House tax bill, said companies paying “hush money” in sexual harassment settlements shouldn’t be allowed to write it off as a business expense.
“As Congress rethinks our tax code, we need to rethink the way we treat Hollywood by eliminating the business expense deduction for hush money associated with sexual assault and sexual harassment cases,” Mr. Buck said.