Report: Trump team covertly giving large tax cuts to rich corporations

Tax Breaks for Wealthy Companies Allegedly Expanded by Trump Administration

According to a report, the Trump administration has reportedly extended significant tax benefits to large corporations, including private equity firms, crypto companies, foreign real estate investors, and others. These tax relief measures have been implemented through quiet notices from the Treasury Department, as initially reported by the New York Times.

Examples of Tax Breaks

Among the examples of these alleged tax relief measures, in October, the IRS propounded new regulations intended to offer tax concessions to foreign investors in U.S. real estate. In August, the IRS suggested a rollback of rules designed to hinder multinational corporations from evading taxes by claiming duplicate losses in multiple countries. These notices have been highlighted by accounting and consulting firms, but have not caused significant public interest.

Kyle Pomerleau, a senior fellow at the American Enterprise Institute, told the Times, “Treasury has clearly been enacting unlegislated tax cuts. Congress determines tax law. Treasury undermines this constitutional principle when it asserts more authority over the structure of the tax code than Congress provides it.”

“One Big Beautiful Bill” Act’s Tax Relief

The aforementioned tax notices build upon the tax relief established in President Donald Trump’s “One Big Beautiful Bill” Act. This Act extended the so-called “Trump tax cuts” from 2017, which the Congressional Budget Office estimated would decrease tax revenue by $4 trillion over the next decade.

More about the “One Big Beautiful Bill” Act

The Act provides over $1.5 trillion in tax cuts for the top 5 percent of Americans, as discovered by the Center for American Progress.

Impact on Biden’s 2022 Inflation Reduction Act

The proposals from the Trump administration appear to target the 2022 Inflation Reduction Act enacted by former President Joe Biden, which ensured profitable corporations paid a minimum tax to counter inflation and diminish the federal deficit. This law generally required corporations with over $1 billion in annual revenue to pay 15 percent of the adjusted financial statement income.

Impact on Corporations

Following the interim guidance issued in September by the IRS, which allowed corporations to “disregard gains and losses that are unrealized for regular tax purposes” on its holdings of digital assets when calculating its adjusted financial statement income, Strategy Inc, a crypto firm, announced it “no longer expects to become subject to” the minimum tax. Natural gas exporter Cheniere Energy also cited the September guidance when it announced last month it was entitled to a refund of the minimum tax previously paid, worth $380 million, as reported by the Times.

Reactions to the Proposals

The Treasury Department defended the proposed regulations to the Times as “a practical approach that supports American investment and competitiveness” and intended to replace the Biden administration’s “compliance maze that would have buried taxpayers in red tape.” However, some experts voiced concerns that these proposals could be adding billions to the federal deficit and possibly exceeding the Treasury’s authority, since Congress is responsible for creating federal tax laws.

Daniel Hemel, a law professor at New York University, expressed to the paper that issuing regulations through the Treasury rather than passing laws through Congress means “you can just give away the goodies to one group, without having to take back anything from another.”