Senate and House Republicans have included a variety of special tax breaks for specific industries within their broader domestic policy legislation. These provisions, which amount to tens of billions of dollars, were added to a bill primarily designed to prevent $4 trillion in looming tax increases set to expire at the end of this year. Among the additions are measures such as a new deduction for business meals at certain Alaskan fishing operations, a $17 billion expansion for venture capitalists, and a $2 billion break for the rum industry.
Critics of these provisions argue that they reward special interests and complicate the tax code, while lawmakers defend them as necessary economic relief. The legislation, which was approved on a narrow vote, has drawn criticism from deficit hawks and some House Republicans who called the provisions ‘loaded with pork’ to secure key Senate votes. Despite concerns, the bill was passed and will now be sent to President Trump for his signature into law.
The inclusion of these provisions has also seen some provisions being removed or altered, including the deletion of an $800 million tax cut for corporations with income in the Virgin Islands. Other provisions, such as a $1 billion tax-exempt bond provision for spaceports, have been kept, with some lawmakers arguing that they are necessary for economic growth. The bill has been criticized as a political maneuver that prioritizes the interests of specific industries over broader economic considerations.
Sen. James Lankford (R-Okla.) won a carve-out for the oil and gas industry from a minimum tax on big corporations that was created during the Biden administration. There’s also a $2 billion break important to the rum industry and, tangentially, Louisiana, said Sen. Bill Cassidy (R-La.), a tax writer.
“We have the highest per capita intake of alcohol in the nation,” he said. The targeted tax breaks have been overshadowed by the main purpose of the legislation: preventing a whole slate of tax cuts from expiring at the end of this year, and enacting a handful of breaks for things like tips and overtime pay that President Donald Trump had promised.
But they nevertheless got the same fast-track-into-law treatment, despite some seeming to come out of nowhere with little public vetting. Some House Republicans grumbled about the provisions — ‘loaded with pork to buy key Senate votes,’ the chamber’s hard-right Freedom Caucus said in a memo to colleagues. But House lawmakers backed down from threats to sink the plan over fiscal concerns and other complaints, and approved it Thursday on a 218-214 vote that sends it to Trump for his signature into law.
Even as Senate Republicans added their own provisions to the legislation, they deleted some earmarks that had been approved by the House. Though some of the add-ons are small — like an increase in a special deduction for certain Alaskan whaling captains to buy weapons and maintain their boats — others have price tags that run in the billions.
The bill includes an expansion of a little-known break that Silicon Valley investors have used to nix tax bills on tens and even hundreds of millions of dollars in earnings from Internet startups. Another spends $26 billion to create a new $1,700 credit for people who give to groups providing scholarships for children to attend private school.
Sen. Mitch McConnell (R-Ky.) secured a $7 billion tax cut for farmers that allows them to postpone paying some of the capital gains taxes they owe when selling off farmland.
There’s also a $1 billion provision allowing