For the past ten years, I’ve been a sole proprietor who pays taxes using personal income tax returns. I’d never considered establishing an LLC (limited liability company). Should I?
Washington is going through another one of its periodic calls for business tax reform. But new research by my Tax Policy Center colleague Joe Rosenberg shows just how hard it is to separate business taxation from the individual tax code. And it should serve as a warning to those who think Congress
Scrambling for a politically acceptable way to raise revenue to pay for a scaled-down social spending and climate bill, Senate Democrats are considering a plan...
Yesterday, the Treasury Department announced it would keep, but limit, an important tool added by the Obama Administration to stem tax-driven corporate inversions: the regulations...
This paper documents the increased role of pass-through entities and the associated decline in use of the taxable corporate form since the Tax Reform Act of 1986 (TRA86) and discusses implications for the design of tax policy. We show how significant reductions in the corporate tax rate, absent
This Tax Fact documents the increasing share of flow-through business income as a percentage of adjusted gross income (AGI) reported on individual income tax returns. In 2012, net income from sole proprietorships, partnerships, and S corporations totaled nearly $840 billion and accounted for more
The Tax Cuts and Jobs Act (TCJA) contains a special 20-percent individual income tax deduction for owners of pass-through businesses that was always going to...
Cutting tax rates on pass-through businesses to 15 percent appears to be a core element of President Trump’s tax agenda. However, new estimates from...
The “Main Street Fairness Act” ( H.R. 5076 and S. 707 ) requires tax “parity” between businesses organized as pass-throughs and corporations. The legislation has...
Income from partnerships and S corporations (which are called "pass-through" businesses) was over 20% of adjusted gross income (AGI) for taxpayers with AGI over $1 million in 2017, compared to 1% for those with AGI under $100,000.
This year, Congress will consider what may be the biggest tax bill in decades. This is one of a series of briefs the Tax Policy Center has prepared to help people follow the debate. Each focuses on a key tax policy issue that Congress and the Trump administration may address. This brief focuses on
According to recent news reports, Congressional Democrats are considering watered-down versions of two measures from last year’s Build Back Better Act . The alternative minimum...
On June 14, I testified before the Senate Small Business and Entrepreneurship Committee on how tax reform might affect small business. I delivered two key...
Distribution of tax units with flow-through business income by source of flow-through business income and statutory marginal tax rate, under current law, 2017.
Distribution of tax units with flow-through business income by source of flow-through business income and expanded cash income level, under current law, 2017.
Distribution of tax units with flow-through business income by source of flow-through business income and expanded cash income percentile, under current law, 2017.