Tax Cuts For the Rich With Expensive Hobbies

The Kentucky Tournament took place over the weekend.

The Preakness Stakes and Belmont Stakes, two big horse races, are expected to take place in the following weeks.

The Triple Crown

The three races are referred to as the “Triple Crown” of thoroughbred racing, since they are held consecutively.

They’re also a good reminder of the intricacies of our tax structure, as well as the waste that results from exemptions for special interest groups and other exemptions. 

As long as the horse was acquired before it turned 24 months old, the national government permits racehorse owners to declare the depreciable property of their horses for a period of three years.

The owners can write off the depreciated value of the property for up to $500,000 in total. 

It’s a specific tax exemption reserved for horse owners who are extremely affluent.

Many of them have racehorses as a costly recreational activity. Both political parties have been vocal in their support for this tax relief. Senate Minority Leader Mitch McConnell (R-KY) has been one of the most vocal in his support. 

In addition to funding the world’s most powerful military and providing financial assistance to those who are elderly, the federal government has other significant obligations as well.

However, funding a niche activity at the expense of tax income, at a time when our nation’s national debt exceeds $30 trillion, is not a prudent decision in our current economic climate.

Despite the fact these wealthy racehorse owners may make significant political contributions to ensure this tax cut remains in place, this carve-out and other frivolous tax breaks do not belong in our nation’s tax structure. 

More Expenses and More Cuts

Regrettably, this is not an unexpected tax advantage, despite the fact it is absurd in nature.

According to CNBC, the federal government provides tax benefits for persons who purchase yachts, private jets (including those used for both business and personal purposes), and breast implants (for work-related purposes). 

In addition, horse racing isn’t the only sport that benefits from specific tax savings provided by the federal government.

Pro sports stadiums receive government grants in the form of tax-exempt municipal bonds, in addition to support from state and local taxpayers.

Municipal bonds are used to fund projects that benefit the general public, such as road construction, bridge construction, and public school construction.

They should not be allowed to exist only for the purpose of making affluent families increasingly wealthier. 

Taxes should be reduced at the federal level, but only for select well-connected parties in specific cases where doing so would be detrimental to the general population.

A larger child tax credit may be able to assist more working families in meeting their financial obligations.

People’s taxes should not be cut just because they have an extravagant hobby, as this is both unneeded and fiscally unsustainable.