Center for American Progress Action

The Tax Bill That Would Launch More Than 13,000 Yachts

The Tax Bill That Would Launch More Than 13,000 Yachts

This fall, the House majority is ignoring working families to focus on giving even more money to its wealthy donors.

If the proposed tax bill passes, members of Congress who voted for the Tax Cuts and Jobs Act could together purchase five new yachts per year. (Getty/Mark Wilson)
If the proposed tax bill passes, members of Congress who voted for the Tax Cuts and Jobs Act could together purchase five new yachts per year. (Getty/Mark Wilson)

The current congressional majority has made its priorities painfully clear. In 2017, the legislative calendar was dominated by an attempt to strip health care from millions of people in order to provide significant tax cuts to the wealthy. When that failed, Congress turned to a tax bill known as the Tax Cuts and Jobs Act of 2017 (TCJA), which was essentially a corrupt giveaway that provided massive windfalls to wealthy donors, special interests, and members of Congress themselves. The law will provide more than $84.7 billion in tax cuts to the top 1 percent of Americans in 2019, while increasing health insurance premiums for millions of people and resulting in nearly 9 million fewer people with coverage.

Many of the staffers who were most involved in the TCJA’s passage have left the Hill for lucrative jobs as lobbyists for the special interests to whom they provided special tax breaks. Rep. Pat Tiberi (R-OH), who helped draft the TCJA, left shortly after its passage to become the head of the Ohio Business Roundtable—many of whose members benefited substantially from the bill.

Perhaps the most ostentatious example of this corruption came from Florida Rep. Vern Buchanan (R). Rep. Buchanan sits on the House committee that was charged with drafting the TCJA—a bill that gave him millions of dollars in special tax breaks. On the same day that he voted to pass the bill, Rep. Buchanan purchased a brand new 73-foot yacht with a base price of nearly $3 million.

Since the tax bill’s passage, corporate profits have shot up by more than 13 percent, while wages have barely moved. While workers have seen virtually no benefits from the TCJA, wealthy donors have been extremely enthusiastic: The bill’s passage reportedly has resulted in tens of millions of dollars in campaign contributions from those who received tax breaks.

As the 2018 midterm elections approach, the U.S. House of Representatives is planning to provide even more giveaways to wealthy donors. Rather than focusing on boosting wages or reducing health care costs to help working families, the House majority is seeking to make expiring provisions in the TCJA permanent. This new proposal would be just as skewed to the rich as the TCJA and would lock in more loopholes and tax breaks that solely benefit the wealthiest Americans. In fact, in 2026 alone—the first year in which the new provisions would take effect—the proposed bill would provide more than $40.3 billion to the richest 1 percent of Americans. That’s enough to buy 13,476 new yachts every year, assuming they cost the same $2,995,000 as Buchanan’s yacht.

Not to be outdone, members of Congress are ensuring that they also receive yacht-sized windfalls. Passing only one of the proposals in the new bill—the extension of the pass-through deduction, which primarily benefits wealthy owners of pass-through businesses such as S corporations and LLCs—would let someone with Rep. Buchanan’s reported income sail away with an extra annual tax break worth up to $2.1 million. In other words, if they were to grow tired of the color of their new yacht—or if it floats away—the tax break would afford them enough money to replace it with a new one every other year. In total, all of the congressional members who voted for the TCJA and benefit from the proposed pass-through provision would be giving themselves a combined annual tax break worth more than $14.4 million by passing the new bill. This means that these members of Congress could together purchase almost five new yachts per year.

It seems that members of the House of Representatives will end the legislative session as they started it—seeking to help their donors and themselves at everyone else’s expense.

Sam Berger is a senior adviser at the Center for American Progress Action Fund. Galen Hendricks is a special assistant for Economic Policy at the Action Fund.

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Sam Berger

Vice President, Democracy and Government Reform

Galen Hendricks

Research Associate