The CARES Act has a tax break that benefits 43,000 millionaires

A Facebook post claims that the Coronavirus Aid, Relief, and Economic Security Act benefits thousands of millionaires. It’s Mostly True.

May 27, 2020 and
Category: Fact-Checking

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I truly hope you all got your $1,200 check — or at least some type of relief from the Coronavirus Aid, Relief, and Economic Security Act. It looks like thousands of millionaires got some relief as well (if you happen to be a millionaire … congrats?!?)

The CARES Act was a roughly $2 trillion bill passed in March that provided economic assistance to everyone from unemployed workers and beleaguered small businesses to overwhelmed hospitals and state governments. Was it also a giveaway to millionaires?

Yes, according to a May 14 Facebook post.

The post is more or less on target.

The CARES Act, which sailed through both houses of Congress, did include language that temporarily suspended a tax provision known as the excess loss limitation. The language is not hidden, but it’s safe to say that given how fast the $2 trillion bill sped through Congress, it mostly escaped media attention.

After this provision in a very big bill came to light, Democratic Sen. Sheldon Whitehouse of Rhode Island and Democratic Rep. Lloyd Doggett of Texas offered bills to roll back the temporary suspension of the tax limitation that was included in the CARES Act.

The “$135 billion tax break” figure in the Facebook post is backed up by the analysis by the bipartisan Joint Committee on Taxation, the official arbiter of the cost of tax proposals considered by Congress.

In its analysis of the CARES Act, the committee found that the tax provision would cost the Treasury about $135 billion between 2020 and 2030, with the bulk of the cost occurring in the first two years, and small gains coming in later years.

As for the 43,000 millionaires figure, that comes from an analysis requested by Whitehouse and Doggett that showed the estimated impact of the provision on different income groups. It was included in a letter that the committee sent to the two lawmakers.

Click here to read the full fact-check.

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Alex Mahadevan is a senior multimedia reporter at MediaWise. He can be reached at amahadevan@poynter.org or on Twitter at @AlexMahadevan. Follow MediaWise on TikTok.