Coronavirus US stimulus: Millionaires to get $2.5m

More than 43,000 ultra-wealthy American millionaires will make a fortune out of a stimulus loophole critics have described as a “scandal”.

At least 43,000 American millionaires who are too rich to get coronavirus stimulus cheques are getting a far bigger boost — averaging $US1.6 million ($A2.5 million) each, according to a congressional committee.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act trumpeted its assistance for working families and small businesses, but it apparently contains an even bigger benefit for wealthy business owners, the committee found.

The act allows pass-through businesses – ones taxed under individual income, rather than corporate – an unlimited amount of deductions against their non-business income, such as capital gains, the Washington Post said.

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They can also use losses to avoid paying taxes in other years.

That gives the roughly 43,000 individual tax filers who make at least $US1 million ($A1.57 million) a year a savings of $70.3 billion — or about $1.6 million ($A2.5 million) apiece, according to the Joint Committee on Taxation.

America has been particularly hard hit by COVID-19. Picture: David Dee Delgado/Getty Images/AFP

Hedge-fund investors and real estate business owners are “far and away” the ones who will benefit the most, tax expert Steve Rosenthal told the Washington Post.

Senator Sheldon Whitehouse called it a “scandal” to “loot American taxpayers in the midst of an economic and human tragedy”.

And Senator Lloyd Doggett said: “Someone wrongly seized on this health emergency to reward ultra-rich beneficiaries.

“For those earning $1 million annually, a tax break buried in the recent coronavirus relief legislation is so generous that its total cost is more than total new funding for all hospitals in America and more than the total provided to all state and local governments,” he said in a statement.

This article originally appeared on the New York Post and has been reproduced with permission