Wealthy donors benefited from lesser-known Trump tax break: report
Wealthy political donors successfully pushed for a tax break in Republicans’ 2017 tax bill that saved them tens of millions of dollars in taxes, ProPublica reported Wednesday.
Those individuals had an ally in Sen. Ron Johnson (R-Wis.), who pressured the Trump administration to increase a tax break for companies known as pass-throughs, which funnel profits to their owners.
Diane Hendricks of roofing firm ABC Supply Co. and Richard and Liz Uihlein of packaging firm Uline together saved $79 million in taxes in 2018 alone thanks to the increased deduction, ProPublica reported. They previously donated more than $20 million to groups supporting Johnson’s 2016 reelection campaign.
Johnson, who has not said whether he will run for reelection next year, said in a statement that his advocacy efforts “had nothing to do with any donor or discussions with them.”
“The measure I fought for and got included in the 2017 Tax Cuts and Jobs Act prevented an unfair differential from growing worse by providing ‘pass-through’ business income relief to partly match what was provided to C-corporations,” Johnson said.
Brendan Bechtel of engineering firm Bechtel, who saved nearly $24 million in 2018 via the pass-through deduction, hired multiple lobbying firms and personally met with Trump administration officials to push for the measure, ProPublica reported.
Former New York City mayor and presidential candidate Michael Bloomberg emerged as a top beneficiary of the pass-through deduction, saving nearly $68 million in taxes in 2018 alone.
Former President Trump’s tax legislation originally included a 17 percent tax break for pass-throughs, but the figure was increased to 20 percent in the final bill.
An April 2021 study from the National Bureau of Economic Research found that the top 1 percent wealthiest Americans received nearly 60 percent of the tax savings created by the tax bill provision.
Democrats vying to unseat Johnson next year capitalized on the report Wednesday.
Wisconsin Lt. Gov. Mandela Barnes (D) tweeted that Johnson “used his office to enrich some of his wealthiest campaign donors while raising taxes on the middle class and widening the income inequality gap.”