Warren Publishes New Independent Analysis Revealing Republican “Bonus Depreciation” Tax Break as Giant Handout Boosting Wealthiest Corporations
Trump’s Big Beautiful Bill permanently extended this corporate tax break
Over 80% of bonus depreciation claimed by corporations from 2018 to 2022 went to those making over $1 billion annually
Joint Committee on Taxation (JCT) shared new data in response to Sen. Warren’s September letter
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), a member of the Senate Finance Committee, published new data from the Joint Committee on Taxation (JCT) — a nonpartisan Congressional committee dedicated to analyzing tax legislation — revealing Republicans’ recent “bonus depreciation” tax break as a giant handout to wealthy corporations.
The new data came in response to a letter Sen. Warren sent in September seeking information about the Big, Beautiful Bill’s permanent extension of 100% bonus depreciation, which allows corporations to write off the entire cost of purchasing many types of equipment, buildings, vehicles and other assets immediately, instead of over many years. 100% bonus depreciation had previously been in effect from 2018 to 2022 due to the first Trump Administration’s 2017 tax legislation.
“Thanks to Donald Trump and Republicans’ Big Beautiful Bill, giant corporations will win big while American families see their costs skyrocket. Next year, the federal government will spend over five times more on these tax handouts for billionaire corporations than it spends each year on child care,” said Senator Warren. "Time and time again, Donald Trump and Republicans have made clear that they stand with billionaires and billionaire corporations — not American families."
Key conclusions from the new JCT data include:
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100% bonus depreciation is disproportionately used by giant corporations. Over 80% of the 100% bonus depreciation claimed by corporations from 2018-2022 went to companies with over $1 billion in yearly income. 99% of bonus depreciation benefits went to corporations making over $1 million annually.
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100% bonus depreciation was an enormous corporate giveaway in the past and is projected to continue being an enormous corporate giveaway in the future. Corporations deducted a total of $2.7 trillion through the tax break when it was in place from 2018 to 2022. JCT now projects that corporations will use 100% bonus depreciation to deduct an additional $172 billion in 2025 and an additional $178 billion in 2026.
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Big Pharma, Big Tech, Big Oil, and Wall Street will win big from 100% bonus depreciation. From 2018 to 2022, the finance and insurance industry deducted $206 billion through 100% bonus depreciation. In 2022 alone, the pharmaceutical industry deducted $10 billion, the oil & gas industry deducted $30 billion, and tech companies deducted $152 billion.
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100% bonus depreciation enables thousands of big corporations to avoid taxes by bringing their income to zero — or even making it negative. In 2022, 81,000 corporations reported zero or negative taxable income due to their use of 100% bonus depreciation. JCT estimates that if the 2018-2022 trend in the use of 100% bonus depreciation continues, about 59% of corporations will report zero or negative taxable income this year — in part, due to 100% bonus depreciation.
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OBBBA will allow for billions of dollars in retroactive bonus depreciation tax breaks this year. In 2025, the government will spend $16 billion on bonus depreciation tax handouts for purchases that companies made before the passage of OBBBA — more than the entire federal government spends each year on child care. Since these tax breaks are retroactive, they cannot incentivize any economic activity and are economically unjustifiable.
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