From spaceports to venture capitalists, tailored tax breaks add billions to megabill

Special tax breaks for venture capitalists, Alaskan fisheries, spaceports, private schools, rum makers and others — together costing tens of billions of dollars — quietly caught a ride on Republicans' sprawling domestic policy megabill.

The legislation is primarily designed to prevent $4 trillion in looming tax increases set to hit at the end of this year. But, shortly before approving the plan, Senate Republicans added a new crop of unrelated, bespoke tax breaks. House GOP lawmakers got in their share, too.

Many are the sort of narrowly targeted breaks Republicans have long complained are unfair, reward influential special interests and unnecessarily complicate the tax code.

There’s a new supersized deduction for business meals — though only for employees at certain Alaskan fishing boats and processing plants, with the measure stipulating the facilities must be “located in the United States north of 50 degrees north latitude” though not in a “metropolitan statistical area.”

There’s a $17 billion expansion of a little-known provision that enables venture capitalists to make a fortune tax-free.

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 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.